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  • Economy

    Expected BOK rate hike prompts concern over rising interest burdens on households, firms

    Expectations of imminent interest rate hikes by the Bank of Korea (BOK) are adding to pressure on households and businesses already struggling with rising borrowing costs, analysts said Sunday. Lending rates at major banks have continued to climb as BOK Gov. Shin Hyun-song struck a hawkish tone following a Monetary Policy Board meeting on May 28, reinforcing market expectations that the central bank could begin raising rates as early as July. According to banking industry data, fixed-rate mortgage loans offered by the country's five major lenders — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — carried interest rates ranging from 4.39 percent to 7.33 percent as of Friday. The upper end of the range was up 0.33 percentage point from a month earlier, when rates stood between 4.4 percent and 7 percent. It marked the first time since October 2022 that the highest fixed mortgage rate among the five major lenders exceeded 7.3 percent. Personal credit loan rates have also moved higher. As of Friday, interest rates on personal credit loans for top-tier borrowers with one-year maturities ra

    2 MIN READBy Lee Hyo-jin
    Expected BOK rate hike prompts concern over rising interest burdens on households, firms
  • Policy

    Top policymakers vow stern action against speculative FX market activities as won weakens

    2 MIN READBy Yonhap
    Top policymakers vow stern action against speculative FX market activities as won weakens
  • Cryptocurrency

    Bithumb's bitcoin payout blunder results in $1.6 mil. compensation

    2 MIN READBy Lee Hyo-jin
    Bithumb's bitcoin payout blunder results in $1.6 mil. compensation
  • Economy

    S. Korean retail investors sell over $641 bil. in overseas stocks in 1st week of June

    1 MIN READBy Yonhap
    S. Korean retail investors sell over $641 bil. in overseas stocks in 1st week of June
  • Economy

    Seoul stocks, won hammered by massive foreign selling

    2 MIN READBy Park Han-sol
    Seoul stocks, won hammered by massive foreign selling
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CEO & Publisher: Oh Young-jinDigital News Email: webmaster@koreatimes.co.krTel: 02-724-2114Online newspaper registration No: 서울,아52844Date of registration: 2020.02.05Masthead: The Korea TimesCopyright © koreatimes.co.kr. All rights reserved.

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Economy

Concerns grow over Korea's pension fund

The National Pension Service's headquarters in Jeonju, North Jeolla Province / YonhapBy Kim Bo-eunKorea's public pension fund is the world's third largest, with close to 1,000 trillion won ($763.3 billion) of assets under management, but there are concerns over the agency's ability to manage the fund.The National Pension Service (NPS) faces the daunting task of reforming its pension system, as the fund is set to be depleted in the coming decades, with Korea's population aging rapidly. The pension fund had initially been estimated to become depleted in 2057, but more recent projections have indicated that it could end up depleted sooner.The Federation of Korean Industries' research unit projects that the percentage of people aged 65 and older will rise from the current 17.3 percent to 37 percent in 2045, making South Korea the most aged country in the world. The federation forecasts that the pension fund will enter a deficit in 2039 and be depleted in 2055 under the current scheme.The Ministry of Health and Welfare has initiated a process to calculate a more accurate estimate by March

Aug 16, 2022By Kim Bo-eun
Concerns grow over Korea's pension fund
Cryptocurrency

Do Kwon says he will cooperate with investigation

Terraform Labs co-founder Do Kwon speaks during an interview with crypto media outlet Coinage in a video uploaded on YouTube, Tuesday. Screenshot from YouTubeBy Lee Min-hyungDo Kwon, the co-founder of Terraform Labs, has shared his plan to cooperate with the ongoing investigation by the Korean prosecution, but declined to confirm when it will be, citing no charges have been brought against him over the collapse of the Terra-Luna cryptocurrencies. Kwon has made no public appearances since the Terra stablecoin and its sister token plummeted in May, but appeared Tuesday in a video-taped interview with overseas crypto media outlet, Coinage.As the once-red hot Terra ecosystem abruptly lost trust from investors around the globe, a group of Luna investors here sued Kwon and Daniel Shin, another co-founder of the company, for fraud.In response, the prosecution has since launched an investigation into the incident and summoned officials from Terraform Labs for questioning. Last month, the joint investigation team also raided Shin's home and the headquarters of Korea's major crypto exchanges.K

Aug 16, 2022By Lee Min-hyung
Do Kwon says he will cooperate with investigation
Economy

Retail investors on bond buying spree amid stock doldrums

gettyimagesbank By Lee Min-hyungRetail investors are on a buying spree of bonds, as they bet more on safer assets amid falling stock market sentiment here and abroad, data showed Monday. According to data from the Korea Financial Investment Association, retail investors have purchased bonds worth 9.54 trillion won at the over-the-counter market from the beginning of this year to Aug. 12. This is more than twofold growth from a year earlier.As the U.S. Fed and the Bank of Korea (BOK) are widely expected to carry out at least two more rate hikes in the latter half of this year, investor preference for bonds or any other forms of safe assets will remain in place throughout 2022, according to market analysts.This is in contrast to the sentiment in the local stock market. They purchased stocks worth 24 trillion won on the benchmark KOSPI during the same period. This is a drop of more than 66 percent from the previous year when stock market sentiment reached its historic

Aug 15, 2022By Lee Min-hyung
Retail investors on bond buying spree amid stock doldrums
Economy

Korean brokerages suffer earnings shocks in 1st half of 2022 amid rate hikes

Dealers at Hana Bank work at its headquarters in Seoul, Aug. 12. YonhapBy Lee Min-yungEarnings at major securities firms here appear to have plummeted in the first half of this year, as steep rate hikes and fears of an economic downturn deterred the influx of capital into the local stock market. Korea's top 10 brokerages, including Mirae Asset Securities, Korea Investment & Securities and Samsung Securities, are estimated to have chalked up a combined net profit of 2.68 trillion won ($2.05 billion) between January and June, down 42.4 percent from a year ago, according to industry data.Most of them suffered drastic earnings falls due to a drop in their stock trading commission profits. The uncertain financial outlook here and abroad froze market sentiment. The daily transaction volume in the local stock market reached 18.47 trillion won in the first half of 2022, down 38.7 percent from a year earlier.The benchmark KOSPI soared to a historic high of more than 3,300 points in June of last year, fueled by post-pandemic market liquidity. But with the U.S. Fed and the Bank of Korea tak

Aug 15, 2022By Lee Min-hyung
Korean brokerages suffer earnings shocks in 1st half of 2022 amid rate hikes
Economy

Customs agency considers taxing intermediaries for brokered overseas purchases

Korea Customs Service (KCS) Commissioner Yoon Tae-sik, second from right, inspects goods that are purchased from online shopping malls abroad at a customs clearance area of Incheon International Airport in this photo take in May. Courtesy of KCSBy Yi Whan-wooThe Korea Customs Service (KCS) is considering levying taxes on intermediaries that purchase goods from abroad on behalf of domestic customers and handle relevant customs clearance processes, according to sources familiar with the matter, Monday. The KCS' move comes as more customers in Korea want to buy goods via online malls overseas on the basis of price, quality, scarcity and other reasons.At the same time, many of them want to avoid dealing with customs procedures that can be perceived as complex and cumbersome.They accordingly shop through intermediaries, who make shopping easier and more convenient in return for commission. The law on e-commerce does not stipulate collecting tax from intermediaries over the profit they make.They are also exempt from penalty and other forms of punishment, in case they falsely report prices

Aug 15, 2022By Yi Whan-woo
Customs agency considers taxing intermediaries for brokered overseas purchases
Economy

Foreign ownership of Korean stocks falls to 13-year low

An electronic board at a Hana Bank dealing room in Seoul shows the benchmark KOSPI closing at 2,527.94 points, Friday, up 0.16 percent from the previous session. YonhapBy Yi Whan-wooThe ratio of Korean stocks owned by foreign investors dropped to a 13-year low of 30.51 percent, according to the Korea Exchange (KRX), Sunday, adding to the woes of the nation's stock market, which has performed poorly in Asia due to global economic risks this year.Some analysts say the benchmark KOSPI is forecast to rebound in August, but whether such a trend will last remains doubtful.Accordingly, more foreign investors may offload Korean shares in the long term in search of safer assets fueled by the U.S. Federal Reserve's credit tightening and the reversal of interest rates between Korea and the U.S.As of Thursday, foreign investors owned 606.2 trillion won ($464 billion) worth of Korean shares, which accounted for 30.51 percent of the total market capitalization of the domestic stock market, the KRX said.The bourse operator also said the rate was the lowest since Aug. 13, 2009, when 30.52 percent of

Aug 14, 2022By Yi Whan-woo
Foreign ownership of Korean stocks falls to 13-year low
Economy

Financial authority seeks to promote pet insurance

gettyimagesbankBy Anna J. ParkA pan-government task force team to promote the local pet insurance market will be launched next month, as the Yoon administration aims to fulfill its pledge of invigorating the pet insurance market, which was one of the Yoon government's 110 national task agenda items. While the Financial Services Commission (FSC) will be easing up on its insurance licensing regulation, the Ministry of Agriculture, Food and Rural Affairs will be conducting a nationwide survey on medical expenses at veterinary clinics. The result of the survey is slated to be announced early next year and based on the findings, the government aims to standardize vet clinic services' treatment procedures from 2024. Both the insurance industry and veterinary clinics welcome the move, as they see the pet-related treatment market growing further due to the government's moves. Once the insurance licensing regulation is eased, it is expected that insurance companies could set up a subsidiary that only focuses on providing pet insurance products. “Currently, the regulation allows only one

Aug 14, 2022By Anna J. Park
Financial authority seeks to promote pet insurance
Economy

Foreign stock ownership dips to 13-year low amid Fed's aggressive rate hikes

This photo, taken Aug. 12, shows the movements of South Korea's stock markets and currency at a Hana Bank dealing room in Seoul's Jung District. YonhapForeigner ownership of South Korean stocks hit a 13-year low this month, the bourse operator said Sunday, as demand for riskier assets declined amid the Federal Reserve's aggressive rate hikes.Foreign investors held 606.2 trillion won ($464 billion) worth of stocks traded on the main KOSPI market as of Thursday, accounting for a yearly low of 30.51 percent of the total market capitalization, according to the data from the Korea Exchange (KRX).It marked the lowest point since Aug. 13, 2009, when foreign stock ownership took up 30.52 percent of the entire market cap.Foreign investors turned to net buyers of Seoul stocks in July, helping the main KOSPI stock index rebound. But so far this year, they have been net sellers by dumping a net 10.6 trillion won worth of local shares.Analysts said foreigners' appetite for riskier assets declined amid the Fed's aggressive monetary tightening and the South Korean currency's weakness against the U.

Aug 14, 2022
Foreign stock ownership dips to 13-year low amid Fed's aggressive rate hikes
Economy

Gov't to cut expenditure next year amid economic challenges: finance minister

Finance Minister Choo Kyung-ho holds napa cabbages used to make kimchi, a popular Korean fermented side dish, at a farm in Gangneung, 237 kilometers east of Seoul, Aug. 13. Yonhap The Korean government plans to cut its expenditures next year, the finance minister said Sunday, as the country aims to tighten its belt amid economic challenges and inflation. The remark indicates the government's budget for 2023 will hover below the 679.5 trillion won ($520 billion) allocated this year. The government had initially planned for 607 trillion won, but the amount rose after Seoul created extra budgets to support pandemic-hit merchants and vulnerable people."Next year's main budget will be significantly lower than that of this year, including extra budgets," Finance Minister Choo Kyung-ho told reporters during his visit to a farm in Gangneung, 237 kilometers east of Seoul.It would mark the first time in 13 years for the government's expenditure to contract from a year earlier

Aug 13, 2022
Gov't to cut expenditure next year amid economic challenges: finance minister
Economy

FSS brings legal battle with Woori Financial chief to Supreme Court

The headquarters of the Financial Supervisory Service (FSS) on Yeouido, Seoul / Courtesy of FSSBy Anna J. ParkThe Financial Supervisory Service (FSS) has decided to appeal to the Supreme Court over a legal battle with Woori Financial Chairman Son Tae-seung, as the two sides have been fighting over the validity of the FSS' sanctions on the financial group's chief. The decision to appeal came several weeks after the FSS lost its appellate trial on the issue in late July.According to the FSS on Thursday, the financial watchdog decided to appeal the case at the country's highest court following thorough considerations and examinations. “The decision to appeal to the Supreme Court has been made, as the FSS views it necessary for the country to set straight of legal and institutional foundation about financial sectors' internal control issues,” the FSS' press release stated. “The decision to bring the case to the Supreme Court is beyond a response to a single case, but rather it is necessary to resolve legal uncertainties surrounding internal control matters stipulated in

Aug 11, 2022By Anna J. Park
FSS brings legal battle with Woori Financial chief to Supreme Court
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