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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
  • Economy

    KRX issues circuit breaker for KOSPI on sharp fall

    1 MIN READBy Yonhap
    KRX issues circuit breaker for KOSPI on sharp fall
  • Economy

    Seoul shares open over 8% lower on inflation, tech slump woes; trading halted for 20 minutes

    2 MIN READBy Yonhap
    Seoul shares open over 8% lower on inflation, tech slump woes; trading halted for 20 minutes
  • Others

    AI-fueled Samsung affiliates reshape KOSPI market cap rankings

    2 MIN READBy Jun Ji-hye
    AI-fueled Samsung affiliates reshape KOSPI market cap rankings
  • 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
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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

New FSC chief vows efforts to stabilize financial market

Financial Services Commission Chairman Kim Joo-hyun gives a speech after being appointed to the position in a ceremony held at the Government Complex in Seoul, Monday. Yonhap Yoon appoints top financial regulator without assembly hearingBy Yoon Ja-youngNew Financial Services Commission (FSC) Chairman Kim Joo-hyun vowed to work on stabilizing the financial market, pointing out that it is difficult to estimate how current market uncertainties will unfold. “I wondered what the people currently expect of the Financial Services Commission. Stabilization of the financial market would come first,” he said in a speech upon his appointment to the position, Monday. His appointment to the top post was approved by President Yoon Suk-yeol on the same day without a National Assembly confirmation hearing. After nominating Kim to lead the FSC early last month, President Yoon had requested the National Assembly send him a report on the nominee's confirmation hearing, but the Nationa

Jul 11, 2022By Yoon Ja-young
New FSC chief vows efforts to stabilize financial market
Economy

BOK walks tightrope trying to balance inflation and interest burden

Ramen and other daily goods are on display at a supermarket in Seoul, Sunday. The Bank of Korea's monetary policy board will hold a rate-setting meeting, Wednesday, to tame soaring inflation. YonhapBy Yi Whan-wooThe Bank of Korea (BOK) is walking on a tightrope as it tries to cap soaring inflation while minimizing the interest burden on debtors. The BOK is anticipated to take an unprecedented “big step” by hiking the benchmark interest rate by 50 basis points at its monetary policy board meeting on Wednesday. Market observers say a “big step” is key to taming inflation, which hit a 23-year high of 6 percent in June.Such an interest rate hike, however, is feared to worsen the interest burden on households, the total debt of which climbed 5.4 percent year-on-year in the first quarter of this year to 1,859.4 trillion won ($1.42 trillion). The BOK has been moving fast to boost the policy rate, raising it by 25 basis points five times since August 2021.“There is a strong chance of a half-percentage point increase in the key interest rate, and the market is ta

Jul 11, 2022By Yi Whan-woo
BOK walks tightrope trying to balance inflation and interest burden
Economy

Exports up 4.7% during first 10 days of July

gettyimagesbankKorea's exports rose 4.7 percent on-year in the first 10 days of July on demand for chips and petroleum products, but the country suffered a trade deficit on soaring fuel costs, data showed Monday.The country's outbound shipments stood at $15.8 billion in the July 1-10 period, compared with $15.1 billion a year earlier, according to the data from the Korea Customs Service.Imports grew 14.1 percent on-year to $21.3 billion during the cited period, resulting in a trade deficit of $5.53 billion.If the current trend continues, Korea is likely to post a trade deficit for the fourth consecutive month in July due to soaring energy costs caused by the protracted war between Russia and Ukraine.Exports, which account for half of the economy, rose 5.4 percent on-year in June, extending their gains to the 20th month, according to the trade ministry.But high oil and commodity prices pushed up the country's imports, resulting in a trade deficit of $2.47 billion last month. In the first half, a trade deficit hit an all-time high of $10.3 billion.Imports of crude oil soared 95.4 perce

Jul 11, 2022
Exports up 4.7% during first 10 days of July
Economy

House prices fall as transactions plummet on interest rate hikes

A bird's-eye view of apartment buildings in Seoul in this file photo. YonhapBy Lee Min-hyungKorea's housing market has entered a major adjustment period represented by falling apartment prices as transactions plummet due to rising interest rates. According to data from the Korea Real Estate Board, the average apartment price in Seoul dropped by 0.03 percent on July 4 compared to a week earlier.Apartment prices in the capital have been edging down for the past five weeks, according to the weekly apartment price report.Local real estate market sentiment abruptly cooled down from the latter half of 2021 after former President Moon Jae-in and his administration introduced strict loan regulations. The set of demand-curbing policies introduced toward the end of the former administration was aimed at blocking more people from joining a buying spree of apartments in Seoul and its surrounding cities. The former president had tried throughout his five-year term to stabilize housing prices as the market had been overheated before he stepped into office in 2017. But in the end, housing prices ro

Jul 10, 2022By Lee Min-hyung
House prices fall as transactions plummet on interest rate hikes
Economy

Specter of recession looms large over Korea

Bank of Korea (BOK) Governor Rhee Chang-yong pauses before answering a question at a press briefing, after the central bank hiked its key interest rate by a quarter percentage point to 1.75 percent, May 26. It was the BOK's first back-to-back rate increase in 15 years. YonhapRecord-high inflation rate, sagging exports back pessimistic views for growthBy Kim Bo-eunHONG KONG ― Korea's export-oriented economy faces an approaching global recession, experts warned Wednesday. The dire projection comes at a time when Korea is witnessing the highest level of inflation in decades, amid weak export growth.The consumer price index for June was up 6 percent year-on-year, which is the highest seen since November 1998 at the height of the Asian financial crisis.Korea also suffered a $10.3 billion trade deficit in the first half of this year, which was the highest level in 25 years.Korea managed to achieve 0.7 percent quarter-on-quarter growth in the first three months of this year, but the following quarters are projected to display significantly weaker growth."Growth for the second quarter will b

Jul 10, 2022By Kim Bo-eun
Specter of recession looms large over Korea
Economy

Paradox of Yoon pursuing market-driven economy while taming inflation

President Yoon Suk-yeol presides over an emergency meeting on economic issues at the presidential office in Yongsan District in central Seoul, Friday. Korea Times photo by Suh Jae-hoonSome anti-inflationary measures raise questions over market interventionBy Yi Whan-wooThe Yoon Suk-yeol administration is pursuing a number of policies that seem at odds with his stated objective of “setting the market economy upright” as it pushes to tame the soaring inflation that is threatening people's livelihoods. The dispute centers on proposals attempting to lower inflation directly through salary freezes, as well as indirectly by curbing wholesale electricity price increases to lessen the burden of financial losses at public corporation Korea Electric Power Corp. (KEPCO).Other proposals are being seen as efforts to help support vulnerable borrowers, consumers and businesses hit hard by inflation. Banks have been reaping record earnings through lending, mainly due to their interest income following hikes in benchmark interest rates to tame inflation, so the Yoon administration is pres

Jul 10, 2022By Yi Whan-woo
Paradox of Yoon pursuing market-driven economy while taming inflation
  • Yoon's approval rating falls below 40% amid turmoil in ruling party
Economy

Savings banks urged to keep guard up against risks, support vulnerable

Financial Supervisory Service (FSS) Governor Lee Bok-hyun speaks during a meeting with 14 local savings bank leaders in central Seoul, Friday. Courtesy of the FSSBy Anna J. ParkFinancial Supervisory Service (FSS) Governor Lee Bok-hyun called on local savings bank leaders to manage their fiscal soundness by fully preparing ample reserves, while also asking them to continue providing loans for the countrys low credit-rating customers. In a meeting with the CEOs of local savings banks on Friday morning, Governor Lee urged the lenders to continue supporting the livelihoods of lower-credit customers by offering loans targeting them. The CEOs of 14 savings banks, including SBI, OK, Welcome and more, gathered for the meeting with the FSS chief. “When the end of the temporary financial benefits from earlier in the pandemic coincides with interest rate hikes, the repayment capacity of borrowers with low credit-ratings is expected to be further weakened,” Lee said during the meeting, asking the leaders of the lenders to expand support for those vulnerable borrowers specifically. FS

Jul 8, 2022By Anna J. Park
Savings banks urged to keep guard up against risks, support vulnerable
Economy

S. Korea seeks U.S. congressional support for corporate activities, trade

South Korea's Trade Minister Ahn Duk-geun, center left, pose with members of the U.S. Congressional Study Group on Korea (CSGK) during their meeting held at Four Seasons Hotel Seoul, Friday. Courtesy of the Ministry of Trade, Industry and EnergySouth Korea's Trade Minister Ahn Duk-geun asked Friday for U.S. lawmakers' support for the passage of a key semiconductor bill as it is expected to help boost South Korean firms' business activities in the U.S. and bilateral trade, his office said.During a meeting with the delegation of the U.S. Congressional Study Group on Korea (CSGK) in Seoul, Ahn asked for its backing for the CHIPS Act, which calls for a $52 billion package of incentives and subsidies to chip manufacturing in the U.S.He also asked for their attention to the passage of the Partnering with Korea Act, which is meant to issue up to 15,000 visas per year for highly skilled South Korean professionals with "specialty occupations," according to the Ministry of Trade, Industry and Energy."The bills are expected to create circumstances favorable to South Korean firms doing business

Jul 8, 2022
S. Korea seeks U.S. congressional support for corporate activities, trade
Economy

Local life insurers' profitability falls

gettyimagesbank By Anna J. ParkLocal insurance companies' loss ratios have risen to their highest levels in five years, indicating the deteriorated profitability of life insurance products. Loss ratio refers to an insurer's incurred losses from paying out coverage divided by the total amount earned in premiums. The figure is used to gauge insurance companies' fiscal soundness for profitability, as the firms need to collect an adequate amount of premiums to cover their total number of life insurance claims. According to the life insurance industry, Friday, the average loss ratio of 22 life insurers based in Korea stood at 86.9 percent, as of the end of the first quarter of this year, which is up 5.5 percentage points compared to the same period last year. The ratio is also at its highest level since the end of 2016, when the burning-cost ratio was 87.5 percent. Many of the companies even logged loss ratios of over 100 percent, meaning that the losses they incurred fr

Jul 8, 2022By Anna J. Park
Local life insurers' profitability falls
Economy

S. Korea to lift import tariffs on more key foodstuffs amid high inflation

A grocery store in Seoul's Seocho District, Thursday. NewsisSouth Korean decided Friday to lift tariffs on seven more kinds of imported foodstuffs, including beef and chicken, in a move to curb surging inflation.Starting this month, the government will remove tariffs on 100,000 tons of imported beef and 82,500 tons of chicken, as well as on imported pork, powdered milk, coffee beans, green onions and ethanol materials, according to the finance ministry.The government began implementing the emergency zero-tariff scheme this year in the wake of surging consumer prices, and a total of 26 major industry and food items, including cooking oil, pork and liquefied natural gas, are currently subject to it.The extension decision came after the country's consumer prices rose 6 percent on-year in June, the fastest clip in nearly 24 years, due mainly to surging fuel costs.The decision was announced after the first emergency economic and public livelihood meeting presided over by President Yoon Suk-yeol earlier in the day.(ATTN: ADDS more info from 4th para, additional photo; CHANGES headline)SEOU

Jul 8, 2022
S. Korea to lift import tariffs on more key foodstuffs amid high inflation
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