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  • Economy

    Weakening won emerges as hurdle to Korea's US investment package

    Korea's weakening currency is emerging as a challenge to the country's planned $350 billion investment package in the United States, analysts said Thursday, as a senior finance ministry official prepares to travel to Washington for talks on foreign exchange market stability. Moon Ji-sung, deputy minister for international affairs at the Ministry of Finance and Economy, will meet senior U.S. Treasury officials in Washington on Friday (local time), according to government sources. Moon's trip is viewed as unusual, as senior officials overseeing foreign exchange policy rarely make separate visits to Washington outside regular consultation channels between the two countries' finance authorities. While the ministry declined to comment on the details of Moon's visit, market watchers expect the discussions to focus on ensuring that exchange rate volatility does not disrupt implementation of Korea's investment commitments in the U.S. The Korean won has remained under pressure in recent weeks, with the won-dollar exchange rate hovering around 1,500-level and trading near its weakest level since 2

    3 MIN READBy Lee Hyo-jin
    Weakening won emerges as hurdle to Korea's US investment package
  • Economy

    InterviewHong Kong's role as Korea-China business bridge grows, Chinese chamber chief says

    3 MIN READBy Lee Yeon-woo
    Hong Kong's role as Korea-China business bridge grows, Chinese chamber chief says
  • Economy

    Seoul shares close higher as AI woes ease amid Middle East uncertainties

    1 MIN READBy Yonhap
    Seoul shares close higher as AI woes ease amid Middle East uncertainties
  • Policy

    Korea's tax agency seeks transformation from tax collector to integrated revenue authority

    3 MIN READBy Jun Ji-hye
    Korea's tax agency seeks transformation from tax collector to integrated revenue authority
  • Economy

    Gov't calls on exporters to address FX volatility

    1 MIN READBy Yonhap
    Gov't calls on exporters to address FX volatility
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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

Fed's less-hawkish-than-expected tone to ease volatility in financial market: analysts

Electronic signboards at Hana Bank in Seoul show the benchmark KOSPI fell 0.11 percent to 2,677.57 points at the closing bell, while the value of the local currency against the dollar rose to 1,266.30 won per dollar, Wednesday. The financial market will resume after a break on Children's Day, Thursday. YonhapBOK likely to deliver additional rate hike on May 26 to prevent reversal in interest gapBy Yi Whan-wooThe volatility in the Korean financial market is likely to ease in the short term due to the latest half-percentage-point increase in the U.S. interest rate, as the level of the hike was within market expectation, according to analysts, Thursday.They said the Federal Reserve had been pointing repeatedly to such a “big-step” rate hike since its previous rate-setting meeting on March 16, and that currency and stock markets in Seoul took into account any resulting shocks in advance.The experts also said the fact that Fed Chair Jerome Powell ruled out the possibility of a 0.75 percentage point increase, or a “giant step” in the benchmark interest rate, can fur

May 5, 2022By Yi Whan-woo
Fed's less-hawkish-than-expected tone to ease volatility in financial market: analysts
Economy

'Korea-US currency swap resumption absolutely needed': experts

An employee fans dollar bills at Hana Bank's counterfeit response center in Seoul, Wednesday. Newsis Incoming administration urged to secure currency-swap deal to stabilize marketBy Anna J. Park As the won-dollar exchange rate and interest rates both continue to soar, market experts are calling for the resumption of the Korea-U.S. currency swap. They view the currency swap deal is an 'absolute must' to stabilize the country's exchange rate, which has been nearing its 14-year high of about 1,300 won per dollar.“It is absolutely necessary for Korea to resume its currency swap deal with the U.S. to stabilize the rising exchange rate,” Kim Dae-jong, a professor at Sejong University, told The Korea Times, adding that the Korean government should heed its utmost priority in stabilizing the foreign exchange market as well as maintaining the country's foreign reserves, in order to avoid a foreign exchange crisis as seen currently in other countries such as Sri Lanka, Pakist

May 4, 2022By Anna J. Park
'Korea-US currency swap resumption absolutely needed': experts
  • Specter of 'perfect storm' looms over Korean economy
Economy

Specter of 'perfect storm' looms over Korean economy

gettyimagesbankIncoming administration urged to take preemptive measures against worst-case scenarioBy Lee Min-hyungThe Korean economy should preemptively combat the possible repercussions of a “perfect storm” of rising inflation, plummeting stock prices and a heightened risk of global supply disruptions, and focus on ensuring corporate resilience, experts said Wednesday.Coupled with the multiple risk factors, the economy is also widely forecast to slow down this year. In February, the Bank of Korea (BOK) presented Korea's 2022 GDP growth outlook of 3 percent, but the central bank is likely to revise down the forecast this month on such pessimistic external signs.The economy also stands at a critical juncture ahead of President-elect Yoon Suk-yeol's inauguration on May 10. As the U.S. Federal Reserve is taking a very big step toward a rate hike, investors are less likely to invest in stocks in emerging markets. The BOK is also widely expected to keep increasing the key rate throughout this year. Korea has already pushed for a preemptive set of rate hikes to 1.5 percent. I

May 4, 2022By Lee Min-hyung
Specter of 'perfect storm' looms over Korean economy
  • 'Korea-US currency swap resumption absolutely needed': experts
Economy

Doubts raised over feasibility of incoming administration's key economic policies

President-elect Yoon Suk-yeol speaks during a meeting of the transition committee at its office in Jongno District in central Seoul, Tuesday. Joint Press CorpsBy Yi Whan-wooKey economic pledges of President-elect Yoon Suk-yeol on fiscal policies, real estate and banking appear to be unattainable or require a considerable amount of time to achieve, as shown by a list of 110 major policy tasks announced by the incoming administration.The transition team came up with the 110 tasks following debates and research on whether Yoon's pledge should be kept or modified to adapt to changing social and economic circumstances following his election win on March 9.On budget spending, the incoming government is likely to follow the outgoing Moon Jae-in administration's expansionary fiscal policy despite accusing it of snowballing national debt.The transition committee said the incoming government will need 209 trillion won ($165.3 billion) more than this year's government budget to implement all of the tasks.The amount was finalized by postponing Yoon's pledge to raise the monthly wage of enlisted

May 4, 2022By Yi Whan-woo
Doubts raised over feasibility of incoming administration's key economic policies
  • President-elect in hot seat over backpedaling on key pledges
Economy

Incoming gov't set to bolster support for ESG management

President-elect Yoon Suk-yeol, right, and presidential transition committee chairman Ahn Cheol-soo hold a board displaying the 110 key policy tasks be pursued by the incoming administration during a briefing at the committee's office in Jongno District in central Seoul, May 3. The 110 tasks include those associated with environmental, social and corporate governance (ESG) management, such as aquatic ecosystems and clean energies. Joint Press CorpsOversight to be set up by private, public sector to facilitate ESG policies By Yi Whan-wooThe incoming administration of President-elect Yoon Suk-yeol is going full force to support environmental, social and corporate governance (ESG) management ― principles that firms around the world are increasingly obligated to observe for sustainable growth. The incoming administration's commitment to ESG is comparable to that of the outgoing Moon Jae-in administration, which came up with the guidelines for building an ESG ecosystem in Korea in August 2021.The guidelines were Korea's first government-initiated ESG guidelines, following the formal introd

May 4, 2022By Yi Whan-woo
Incoming gov't set to bolster support for ESG management
Economy

Korea April FX reserves fall on stronger dollar

gettyimagesbankKorea's foreign exchange reserves measured in U.S. dollars shrank by the most in more than two years in April on the dollar's strength and dollar-selling intervention by the authorities, data showed on Wednesday.The country's foreign exchange reserves stood at $449.30 billion as of the end of April, down $8.51 billion from $457.81 a month before, the Bank of Korea said.It was the biggest monthly fall in the amount of foreign exchange reserves valued in U.S. dollars since March 2020.The Bank of Korea in a statement attributed the decline to a stronger U.S. dollar and "measures to ease volatility in the foreign exchange market", a phrase often used to describe intervention by the authorities.It did not elaborate on the intervention.The won fell 3.5 percent against U.S. dollar last month, logging the fastest monthly fall since October 2016. (Reuters)

May 4, 2022
Korea April FX reserves fall on stronger dollar
Economy

BOK board members call for further rate hikes amid rising inflationary pressure: minutes

BOK Gov. Rhee Chang-yong / Korea Times fileMembers of the central bank's rate-setting board called for further rate hikes after deciding to raise borrowing costs in April, saying the current interest rate level remains still "accommodative" amid worries over rising inflationary pressure, minutes from the latest policy meeting showed Tuesday.In the April 14 rate-setting meeting, the monetary policy board of the Bank of Korea (BOK) voted unanimously to hike the policy rate by a quarter percentage point to 1.5 percent. This marked the fourth rate increase since August last year, as it grapples with inflation running high amid soaring energy prices and a rebound in demand from the COVID-19 pandemic. The rapid rate hikes come after the BOK had maintained borrowing costs at record lows for about two years to stave off a recession from the pandemic, but market watchers worry steep increases could stymie economic growth."It is possible that a rate hike and resulting rises in market rates could put a drag on economic recovery, but stabilization in inflation expectation is a prerequisite to re

May 3, 2022
BOK board members call for further rate hikes amid rising inflationary pressure: minutes
Economy

Inflation expected to continue upward trend

Consumer price growth hits over-13-year high in AprilBy Lee Min-hyungConsumer prices soared by almost 5 percent in April, the highest since the 2008 global financial crisis, and are feared to continue rising at an alarming pace for the time being amid global inflation shocks, experts said Tuesday. Statistics Korea said Tuesday the consumer price index rose last month by 4.8 percent from a year earlier. The pace of inflation has risen sharply from the previous month when the figure stood at 4.1 percent. The inflationary pressure was sparked by price hikes of petroleum products and public utilities such as electricity and gas, according to the statistics agency.The agency also warned that the economy will likely face a growing inflationary burden for the next few months.“There stands a high probability that consumer prices will keep rising considerably, and we do not see any signs that will help slow down the pace of inflation,” said Eo Yoon-sun, an official at the economic statistics division of Statistics Korea.The Bank of Korea (BOK) also expected the economy to continue

May 3, 2022By Lee Min-hyung
Inflation expected to continue upward trend
Economy

Inflation growth hits over 13-year high in April amid soaring fuel prices

gettyimagesbank South Korea's consumer prices rose at the fastest pace in more than 13 years in April amid soaring energy costs caused by Russia's war with Ukraine and a rebound in demand from the COVID-19 pandemic, data showed Tuesday.Consumer prices spiked 4.8 percent last month from a year earlier, accelerating from a 4.1 percent year-on-year gain in March, according to the data from Statistics Korea.It marked the fastest year-on-year increase since October 2008, when consumer inflation climbed 4.8 percent, and the second straight month that inflation growth exceeded 4 percent.Consumer prices rose above 2 percent ― the central bank's inflation target over the medium term ― for the 13th straight month in April.Core inflation, which excludes volatile food and oil prices, advanced 3.1 percent last month.South Korea's inflation has been under upward pressure as oil prices surged on tight supply concerns over Russia's invasion of Ukraine. Demand-pull price pressure ha

May 3, 2022
Inflation growth hits over 13-year high in April amid soaring fuel prices
  • What is behind plunging Korean won?
Economy

What is behind plunging Korean won?

Uncertainty over FOMC and weakening of euro and yen behind strong greenback By Anna J. ParkThe Korean won's weakness against the greenback is expected to continue for the time being, despite foreign exchange authorities' strong willingness to intervene in the market, as experts view necessary momentum to shift the current tide is lacking. On Tuesday, the won-dollar exchange rate ended at 1,267.8 won per dollar at Seoul's foreign exchange market, up 2.7 won from the previous trading session, amid the market's strengthened anxiety over the upcoming U.S. Fed's Open Market Committee (FOMC).As the FOMC this week is expected to take a “giant step,” or a 0.75 percentage point increase of the key interest rate, the market's preference for safe assets, including the dollar, has only strengthened more. The recent surge of the won-dollar rate is triggering concern as it has not reached the 1,300 won mark since the 2008 global financial crisis. However, if one looks into Korea's economic fundamentals, it is questionable whether the economy, which has performed relatively well despite

May 3, 2022By Anna J. Park
What is behind plunging Korean won?
  • Inflation growth hits over 13-year high in April amid soaring fuel prices
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