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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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Economy

High inflation expected to persist throughout 2nd half

Consumer inflation outlook hits all-time high of 4.7% in JulyBy Yi Whan-wooConsumer expectations for inflation hit a record high at 4.7 percent in July, while their confidence in economic prospects fell to the lowest level in nearly two years, a Bank of Korea (BOK) survey showed, Wednesday.The survey suggests consumers are not optimistic about inflation letting up in the second half, in contrary to the country's top economic policymaker who forecast prices will peak out in the months to come.The survey, conducted from July 11 to 18 on 2,500 households, showed that consumers expect inflation to average around 4.7 percent over the next 12 months. The figure marked the highest level since the central bank began compiling related data in July 2008.This year, the figure remained in the 2 percent range between January and March before hovering in the 3 percent range between April and June.Consumers' inflation outlook in July also accelerated at the fastest pace ever, up 0.8 of a percentage point from June, when it climbed 0.6 of a percentage point from May. “It appears consumers thin

Jul 27, 2022By Yi Whan-woo
High inflation expected to persist throughout 2nd half
  • Biz sentiment for July hits 17-month low on inflation, recession woes
Economy

Expected inflation hits record high, consumer sentiment dips to 21-month low, in July

Bank of Korea / YonhapExpected inflation in Korea hit a record high in July amid rising energy and commodity costs, while consumer sentiment fell to the lowest point in 21 months, central bank data showed Wednesday.Expected inflation, an index gauging 12-month consumer price gains, hit a 4.7 percent, the highest since 2008 when the central bank began compiling related data, according to the Bank of Korea (BOK).The July's expected inflation was up from the previous month's figure of 3.9 percent, the data showed.Data on expected inflation is closely monitored, as a rise could prompt people to demand wage hikes due to expectations that their real purchasing power will decline. Those wage hikes can eventually put more pressure on already-high inflation.Korea has been grappling with high-flying price pressure, as rebounding demand following the pandemic and supply chain bottlenecks caused by the war in Ukraine sent energy and key commodity prices higher.Consumer prices soared 6 percent in June from a year earlier, the fastest clip in nearly 24 years and acceleration from a 5.4 percent on-

Jul 27, 2022
Expected inflation hits record high, consumer sentiment dips to 21-month low, in July
Economy

How far will banking groups advance into new industries as gov't deregulates?

GettyimagesbankIT, metaverse, funeral, pet care among list of possible new business opportunitiesBy Yi Whan-wooBanking firms will soon be unrestrained as they search for their next growth engines ― in non-financial sectors ― under the government's latest deregulation plan, prompting speculation over possible new businesses that they may be interested in.Announced by the Financial Services Commission (FSC) on July 19, the plan is aimed at easing a rule that restricts banks and industrial firms from stepping into each other's industries, as a part of efforts to curb unfair business practices by conglomerates.Under the rule, industrial businesses can own up to a 4 percent stake in a bank, and the latter can own up to a 15 percent stake in a non-financial firm.The FSC finds the rule outdated, especially during the “big blur” era, when barriers among businesses are becoming vague due to the rapidly-evolving nature of digital technology.Under the newly released proposals, banks are looking at IT businesses as a way to compete against big tech firms that have been capitalizing o

Jul 27, 2022By Yi Whan-woo
How far will banking groups advance into new industries as gov't deregulates?
Economy

IMF cuts 2022 growth outlook for South Korea to 2.3 percent

A photo of the International Monetary Fund (IMF) logo / Reuters-YonhapThe International Monetary Fund (IMF) on Tuesday lowered its 2022 economic growth outlook for South Korea to 2.3 percent, as Asia's fourth-largest economy faces heightened external economic uncertainty amid high inflation.The revision marked a decrease from the growth forecast of 2.5 percent that the Washington-based organization made in April. The IMF also cut next year's growth estimate for South Korea to 2.1 from 2.9 percent.The IMF's 2022 growth outlook is lower than the South Korean government's forecast of 2.6 percent and the 2.7 percent projection by the Bank of Korea (BOK).Still, the IMF's 0.2 percentage-point cut for Korea's 2022 growth outlook was smaller than the average of 0.8 percentage-point decline for advanced nations, according to Seoul's finance ministry.The South Korean economy faces a risk of stagflation, a mix of slowing growth and high inflation, due to heightened economic uncertainty from the protracted war between Russia and Ukraine, and the Federal Reserve's aggressive rate hikes.The Korean

Jul 26, 2022
IMF cuts 2022 growth outlook for South Korea to 2.3 percent
  • Slowdown in exports raises concerns over Korea's growth
Economy

Trade chief calls for IPEF's 'flexible, effective' role amid uncertainties

Trade Minister Ahn Duk-geun speaks during a videoconferencing at the Supply Chain Ministerial Meeting 2022 on July 20. Courtesy of Ministry of Trade, Industry and EnergyKorean Trade Minister Ahn Duk-geun on Tuesday stressed the need to make the Indo-Pacific Economic Framework (IPEF) a flexible and effective mechanism to better respond to fast-changing global trade circumstances as member nations have prepared to launch official negotiations.Ahn made the remarks during a two-day IPEF ministerial meeting held via teleconferencing from Tuesday, which also brought together 13 top trade officials from the United States, Japan, Australia, New Zealand, India and Singapore, according to the Ministry of Trade, Industry and Energy.The two-day meeting was co-hosted by U.S. Trade Representative Katherine Tai and U.S. Commerce Secretary Gina Raimondo. The IPEF, launched by U.S. President Joe Biden in May, covers four key areas ― fair trade, supply chain resilience, infrastructure and green technology, and tax and anti-corruption."The IPEF is meant to play a role as a flexible and effective mechan

Jul 26, 2022
Trade chief calls for IPEF's 'flexible, effective' role amid uncertainties
Economy

Seoul shares end higher ahead of U.S. rate decision

Employees look at monitors at the dealing room of Hana Bank headquarters located in central Seoul, Tuesday. YonhapSeoul shares ended higher Tuesday helped by tech and auto gains, with investors awaiting the Federal Reserve's rate decision and major firms' earnings results this week. The Korean won rose against the U.S. dollar.The Korea Composite Stock Price Index (KOSPI) rose 9.27 points, or 0.39 percent, to close at 2,412.96. Trading volume was moderate at 409.32 million shares worth 6.15 trillion won ($4.7 billion), with gainers outstripping losers 442 to 358.Institutions and foreigners bought a combined 48.7 billion won worth of stocks, offsetting individuals' stock purchases valued at 47.9 billion won.All eyes are now on the upcoming rate decision by the U.S. central bank Wednesday amid rising inflation and earnings results by tech heavyweights, such as Apple. Microsoft, Amazon and Samsung Electronics Co., analysts said.The Fed is widely expected to raise borrowing costs by 0.75 percentage point this week. That would put the U.S. benchmark rate in a range of 2.25-2.5 percent, the

Jul 26, 2022
Economy

CFA Society Korea reappoints current president to lead for two more years

CFA Society Korea President Park Chun-woong / Courtesy of CFA Society KoreaBy Anna J. ParkPark Chun-woong, CEO of Eastspring Asset Management Korea, has been tapped once again to lead the CFA Society Korea for two more years, renewing his current two-year term. Park was first appointed as chairman of the CFA Society Korea in September 2020. His term was supposed to end by August this year, however, with his reappointment, Park will be leading it until August 2024.“As the president of the society, I will continue various social activities that not only support the pride of chartered financial analysts (CFA) but also contribute financial knowledge to Korean society,” Park said. After graduating from Yonsei University, Park earned his MBA from the University of Notre Dame in the U.S. He worked from 2005 to 2009 as a senior managing director at Woori Investment & Securities ― which was merged into NH Investment & Securities in 2015. He also worked as CEO of Mirae Asset Global Investment in Hong Kong from 2011 to 2012, until he took the leadership role in Eastspring As

Jul 26, 2022By Anna J. Park
CFA Society Korea reappoints current president to lead for two more years
Economy

Slowdown in exports raises concerns over Korea's growth

GDP grows 0.7% in Q2; IMF cuts 2022 growth outlook to 2.3%By Yi Whan-wooThe Korean economy grew at a faster-than-expected pace in the second quarter of this year, on the back of an increase in private spending. But exports, the key engine for growth, suffered a major setback amid a global slowdown fanning worries that the economy will lose steam in the latter half of this year.In its preliminary report, Tuesday, the Bank of Korea said the nation's gross domestic product (GDP) grew 0.7 percent during the second quarter from the previous quarter, compared to a 0.6 percent expansion in the January-March period.It marked the eighth straight quarterly growth since the third quarter of 2020 when it rose 2.3 percent. On a year-on-year basis, the GDP in the second quarter expanded 2.9 percent.The GDP growth was powered only by a temporary uptick in consumer spending following the lifting of social distancing measures. The spending grew 3 percent, the highest since the second quarter of 2021 and marking a turnaround from the first quarter's 0.5 percent contraction.However, both exports and fa

Jul 26, 2022By Yi Whan-woo
Slowdown in exports raises concerns over Korea's growth
  • IMF cuts 2022 growth outlook for South Korea to 2.3 percent
Economy

State-run lenders' relocation plans hit snag

Members of Korea Development Bank's union protest in front of its headquarters on Yeouido in Seoul, June 9. YonhapBy Lee Min-hyungPlanned relocations of state-run lenders here have hit a snag, as growing internal resistance has stalemated the moves even months after the inauguration of President Yoon Suk-yeol.The Yoon administration expressed its strong will to relocate the headquarters of the Korea Development Bank (KDB) to the nation's southeastern port city of Busan.But the move has made little progress since Yoon took office in early May. KDB's new Chairman Kang Seog-hoon is also in a dilemma amid escalating pressure from the lender's union, which stepped up its hard-line rhetoric against the relocation plan.The union reiterated its firm determination to keep protesting until the government drops the plan. It even took about two weeks for Kang to enter his office after having been appointed for the position, as KDB union members blocked his entry into the headquarters in Seoul.He shared his plan to “hold a special communication committee” to narrow the gap between man

Jul 26, 2022By Lee Min-hyung
State-run lenders' relocation plans hit snag
Economy

Regulators eye measure to help at-risk financial firms

The Financial Supervisory Service (FSS) / YonhapKorea's financial regulators on Tuesday decided to map out a scheme to provide help in advance to those financial firms whose balance sheets are soured amid rising uncertainties at home and abroad.The Financial Services Commission (FSC), Financial Supervisory Service (FSS) and state-run Korea Deposit Insurance Corp. (KDIC) agreed to draft a bill on implementing preemptive measures to save potentially nonviable financial firms with a fund backed by the KDIC. They also agreed to improve contingency measures implemented in the wake of the 1997 financial crisis.The regulators' move came as the fast-appreciating U.S. dollar has raised concerns about potential outflows of large amounts of foreign capital. The steep hike in the interest rates also added pressure on the borrowers, pushing financial firms to increase reserves against bad debts. The Bank of Korea (BOK), the country's central bank, raised its seven-day repo rates to 2.25 percent his month, sharply up from 0.5 percent a year ago.The authorities are paying keen attention to the pote

Jul 26, 2022
Regulators eye measure to help at-risk financial firms
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