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  • Others

    KOSPI plunges 8% on concerns over end of chip earnings cycle, interest rate hike

    Korean stocks tumbled Monday, as a broad-based correction in global semiconductor shares triggered heavy selling across the market, prompting the activation of both sidecar trading curbs and circuit breakers on the KOSPI and Kosdaq markets. Attention is centered on whether KOSPI, which has staged a record-breaking rally this year, can resume its upward trajectory after a short-term correction or whether market volatility will intensify further. The benchmark KOSPI opened 112.50 points, or 1.38 percent, lower at 8,048.09 before extending its losses throughout the session to close at 7,484.41, down 676.18 points, or 8.29 percent. The index reached an all-time intraday high of 8,933.62 on June 2. After plunging 5.54 percent on Friday, the KOSPI posted losses for a second consecutive session, underscoring growing concerns over a pullback in semiconductor stocks that had fueled the market's recent rally. Amid heavy selling pressure, trading restrictions kicked in shortly after the market opened, with a Level 1 circuit breaker triggered at 9:03 a.m. and a sell-side sidecar activated at 9:34 a.

    3 MIN READBy Jun Ji-hye
    KOSPI plunges 8% on concerns over end of chip earnings cycle, interest rate hike
  • Economy

    Lee attributes weakening won to foreign investors' portfolio rebalancing

    2 MIN READBy Lee Hyo-jin
    Lee attributes weakening won to foreign investors' portfolio rebalancing
  • Economy

    Financial authorities vow stern action against excessive volatility, one-sided FX market moves

    2 MIN READBy Yonhap
    Financial authorities vow stern action against excessive volatility, one-sided FX market moves
  • Economy

    Corporate lending grows at fastest pace in 3 1/2 years in Q1: BOK

    1 MIN READBy Yonhap
    Corporate lending grows at fastest pace in 3 1/2 years in Q1: BOK
  • Economy

    Economy continues 'gradual improvement' on strong chip exports: KDI

    2 MIN READBy Yonhap
    Economy continues 'gradual improvement' on strong chip exports: KDI
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Economy

Kospi dips to 19-month low on inflation fears

An employee passes by market index monitors at the dealing room of Hana Bank headquarters in central Seoul, Monday. The main benchmark Kospi fell by 3.52 percent, finishing at 2,504.51 points at Monday's closing, which is the lowest level since Nov. 13, 2020. YonhapWon-dollar rate soars to 1,284 won amid foreign selling spree By Anna J. ParkKorean stocks took a heavy beating Monday, with the benchmark Korea Composite Stock Price Index (Kospi) falling to the lowest level in 19 months on the back of a foreign selling spree amid growing fears over stagflation here and abroad.The Kospi closed at 2,504.51, down 3.52 percent or 91.36 points from Friday's close. It was the lowest level since it ended at 2,493.97 on Nov. 13, 2020.The tech-laced Kosdaq also plunged 4.72 percent to 828.77.The major setback came after U.S. stocks tumbled Friday following news that U.S. consumer prices grew 8.6 percent in May, marking the highest increase since 1981, which raised the possibility of the U.S. Federal Reserve taking a “giant step” by raising its base rate by more than a half percentage

Jun 13, 2022By Anna J. Park
Kospi dips to 19-month low on inflation fears
Economy

Hana Bank ordered to compensate up to 80 percent of losses from controversial fund

Civic activists hold a protest against Hana Bank's disputed sales of Italian Health Care Fund in front of the Financial Supervisory Service in Yeouido, Seoul, Monday. Yonhap By Yi Whan-wooThe Financial Supervisory Service (FSS) has ordered Hana Bank to compensate up to 80 percent of the losses inflicted on customers over a fund scandal amounting to hundreds of billions of won, Monday. It was the first FSS decision on pending financial disputes after former prosecutor Lee Bok-hyun took office as FSS governor last week.Being the first ex-prosecutor to lead Korea's market watchdog, Lee draws mixed views on whether he can capitalize on his experience in investigations involving financial fraud and whether he lacks understanding of financial regulatory policies.The FSS asked Hana Bank to compensate 80 percent and 75 percent, respectively, for the losses of the two customers who filed a complaint over the Italian Health Care Fund sold by the lender from October 2017 to Se

Jun 13, 2022By Yi Whan-woo
Hana Bank ordered to compensate up to 80 percent of losses from controversial fund
Economy

Time to embrace possible Korea-US interest rate gap reversal: experts

Meat products are seen on display at a grocery store in New York City, Friday, when the U.S. Department of Labor announced consumer inflation rose to a new 40-year high of 8.6 percent in May. AFP-YonhapBy Yi Whan-wooAs 40-year-high inflation in the United States is fueling bets on the U.S. Federal Reserve's sharper-than-expected hike in its benchmark interest rate, the possibility of a reversal of the interest rate gap between the U.S. and Korea is higher than ever. Experts urge Korea to embrace that possibility gradually rather than taking excessive countermeasures to prevent it from happening.In the case of an interest rate reversal, the U.S. would have a higher rate than Korea. This is feared to spark an exodus of capital from Seoul and the Bank of Korea's (BOK) latest base rate hike was seen as necessary to be in tandem with that of the U.S. “The soaring U.S. inflation is largely being affected by the prolonged war between Russia and Ukraine, which pushes the prices of energy and food upward. And inflation is likely to grow as no one knows for sure when the war will end,&rd

Jun 13, 2022By Yi Whan-woo
Time to embrace possible Korea-US interest rate gap reversal: experts
Economy

Ruling party considering enacting law on blockchain platforms to regulate cryptocurrencies

Rep. Sung Il-jong of the PPP, right, speaks during a party-government consultative meeting on virtual assets at the National Assembly in Seoul, June 13. Yonhap The ruling People Power Party (PPP) is considering enacting a law on blockchain-based platforms to better regulate cryptocurrencies and protect investors, the party's chief policymaker said Monday. "We are thinking of making a law on blockchain-based platforms," Rep. Sung Il-jong of the PPP said during a party-government consultative meeting on virtual assets. "Some parts are mentioned in the Special Financial Transaction Law, but overall it's not organized."The move comes after the crash of TerraUSD, known as a "stablecoin," and its sister coin Luna caused massive losses to many investors across the world and raised the need to better regulate the fast-growing market and protect investors from excessive volatility.At the meeting, the PPP and government officials called for voluntary regulatory measures from

Jun 13, 2022
Ruling party considering enacting law on blockchain platforms to regulate cryptocurrencies
Economy

Korea to take action against won's excessive volatility

A currency trader walks by screens showing the Korean Securities Dealers Automated Quotations (Kosdaq), center, and the foreign exchange rates at a foreign exchange dealing room in Seoul, June 8. The foreign exchange authorities said Monday they were closely monitoring the foreign exchange market as the Korean currency has shown excessive volatility. AP-YonhapThe foreign exchange authorities said Monday they were closely monitoring the foreign exchange market as the Korean currency has shown excessive volatility.The finance ministry and the central bank said they will make efforts to prevent the won from excessively moving in a one-sided direction.The Korean currency was trading at 1,285.50 won per the U.S. dollar as of 1:50 p.m., down 16.6 won from the previous session. (Yonhap)

Jun 13, 2022
Korea to take action against won's excessive volatility
Economy

Korea faces tough time curbing surge in government debt

gettyimagesbankBy Yoon Ja-youngMajor advanced economies succeeded in decreasing government debt ratios last year, but Korea is seeing the ratio surge despite a huge increase in tax revenues. According to Organization for Economic Cooperation and Development (OECD) data, all of the G7 countries ― the U.S., the U.K., France, Germany, Japan, Canada and Italy ― saw a decline in the ratio of government debt to gross domestic product (GDP) last year.Italy saw the general government debt-to-GDP ratio reach 175 percent last year, down 10.5 percentage points from 2020.Canada's ratio contracted by 9.6 percentage points during the same period, and France by 7.9 percentage points. The U.S. also saw its ratio dip by 6.5 percentage points and the U.K. by 6 percentage points. Japan, which has been suffering from snowballing government debt, saw the debt edge down 0.4 percentage point.The government debt-to-GDP ratio of Korea, meanwhile, stood at 47.9 percent last year, up 2.5 percentage points from 2020. While the ratio itself is still far lower than those of other developed economies, the data is

Jun 13, 2022By Yoon Ja-young
Korea faces tough time curbing surge in government debt
Economy

Exports down 12.7% during first 10 days of June

gettyimagesbank Korea's exports fell 12.7 percent year-on-year in the first 10 days of June due largely to fewer working days, data showed Monday.The country's outbound shipments stood at $15.07 billion in the June 1 to 10 period, compared with $17.3 billion a year earlier, according to the data from the Korea Customs Service.Imports rose 17.5 percent to $21 billion during the cited period, resulting in a trade deficit of $5.99 billion.In June, the number of working days declined from a year earlier due to public holidays, including the June 1 local elections and June 6 Memorial Day. (Yonhap)

Jun 13, 2022
Exports down 12.7% during first 10 days of June
  • Fears loom over twin deficits, stagflation
Economy

Fears loom over twin deficits, stagflation

Cargo containers are stacked at a port in Busan, May 31. YonhapConcern increases over weak private consumption and shrinking investmentBy Lee Min-hyungThe Korean economy is faced with a heightened risk after the country reported a current account deficit this April for the first time in two years.Coupled with a years-long deficit in the consolidated fiscal balance, these twin deficits are feared to take a heavy toll on the economy.Other risk factors, such as rising inflationary pressure and the soaring won-dollar exchange rate, will also make it harder for the economy to achieve a post-pandemic recovery.According to data from the Bank of Korea (BOK), Korea's current account deficit reached $80 million (102.4 billion won) in April, as surging raw material prices augmented imports and local firms increased dividend payouts to overseas investors.This escalates concerns over the economy falling into a trap of twin deficits, at a time when the nation's consolidated fiscal balance is also widely forecast to report a deficit for the whole of 2022. The figure turned into a deficit in 2019, a

Jun 12, 2022By Lee Min-hyung
Fears loom over twin deficits, stagflation
  • Exports down 12.7% during first 10 days of June
Economy

US inflation hit a new 40-year high last month of 8.6%

In this photo provided by the New York Stock Exchange, specialist Michael Pistillo works at his post on the trading floor, June 8. AP-YonhapThe costs of gas, food and other necessities jumped in May, raising inflation to a new four-decade high and giving American households no respite from rising costs. Consumer prices surged 8.6% last month from 12 months earlier, faster than April's year-over-year surge of 8.3%, the Labor Department said Friday. On a month-to-month basis, prices jumped 1% from April to May, a steep rise from the 0.3% increase from March to April. Much higher gas prices were to blame for most of that increase. America's rampant inflation is imposing severe pressures on families, forcing them to pay much more for food, gas and rent and reducing their ability to afford discretionary items, from haircuts to electronics. Lower-income and Black and Hispanic Americans, in particular, are struggling because, on average, a larger proportion of their income is consumed by necessities. Economists do expect inflation to ease this year, though not by very much. Some analysts ha

Jun 10, 2022
US inflation hit a new 40-year high last month of 8.6%
Economy

Rhee stresses central banks' role as inflation fighters, hints at additional hikes

Bank of Korea (BOK) Governor Rhee Chang-yong delivers a commemorative speech during the BOK's 72nd anniversary ceremony in Seoul, Friday. YonhapBy Yi Whan-wooBank of Korea (BOK) Governor Rhee Chang-yong underscored the role of central banks as inflation fighters, Friday, warning that inflation could worsen if countermeasures are not taken in a timely manner.He implied that the BOK might raise the benchmark interest rate again in July and August, following five pandemic-era rate hikes that have been carried out since August 2021. In May, the rate was hiked to the highest level since mid-2019, 1.75 percent.“In the short term, rate hikes could increase the difficulties for vulnerable people, but missing the timing could enable inflation to mount further, and it could aggravate the damage,” Rhee said in a speech to mark the 72nd anniversary of the BOK's founding in Seoul. He said central banks' role in taming inflation is becoming important as global inflationary pressure “is likely to last for a significant period of time.”He assessed Korea is no longer believed

Jun 10, 2022By Yi Whan-woo
Rhee stresses central banks' role as inflation fighters, hints at additional hikes
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