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  • Economy

    US Fed's hawkish hold strengthens case for BOK rate hike in July

    The U.S. Federal Reserve's hawkish signal has reinforced expectations that the Bank of Korea (BOK) will raise interest rates as early as next month, market observers said Thursday. With inflation concerns persisting in both countries, monetary officials in Washington and Seoul are increasingly focused on restoring price stability, potentially marking the start of a renewed tightening cycle in both economies. The Fed held its benchmark interest rate steady Wednesday (local time) in its first policy decision since Kevin Warsh became its chair. The U.S. central bank unanimously left the federal funds rate unchanged at 3.5 percent to 3.75 percent, marking its fourth consecutive pause. The latest dot plot showed that nine of the 19 Federal Open Market Committee participants expected interest rates to be higher than current levels for the rest of this year. Warsh did not submit a rate projection. The Fed's hawkish stance has added to pressure on the BOK to tighten its policy, as officials here seek to contain inflation and limit the impact of a wide interest rate gap with the United States. Mar

    2 MIN READBy Lee Hyo-jin
    US Fed's hawkish hold strengthens case for BOK rate hike in July
  • Others

    Gold's unusual price swings leave investors at crossroads

    3 MIN READBy Jun Ji-hye
    Gold's unusual price swings leave investors at crossroads
  • Economy

    Chip giants push KOSPI past 9,000, masking broader market weakness

    2 MIN READBy Lee Yeon-woo
    Chip giants push KOSPI past 9,000, masking broader market weakness
  • Economy

    Seoul launches state-run body to implement $350 bil. US investment pledge

    2 MIN READBy Yonhap
    Seoul launches state-run body to implement $350 bil. US investment pledge
  • Economy

    Korea rises 6 spots to 21st in world competitiveness rankings

    2 MIN READBy Lee Yeon-woo
    Korea rises 6 spots to 21st in world competitiveness rankings
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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

Hurdles remain for MSCI developed market status

Finance Minister Hong Nam-ki speaks during a ministerial meeting at Government Complex in Seoul, Thursday. YonhapKorea seeks inclusion in watch list for MSCI developed markets indexBy Lee Min-hyungThe Korean stock market still faces multiple hurdles before it can achieve developed market status from Morgan Stanley Capital International (MSCI), despite the government's much-touted bid to ease regulations on the local foreign exchange market, experts said Thursday.Under the drive by the Ministry of Economy and Finance, Korea will ease rules on the local exchange and capital markets to place its name on the MSCI watch list by June 2022. The Korean equity market will be eligible for the much-sought-after status only a year after entering the list. The country's status may be upgraded in 2024 at the earliest under the assumption that it succeeds in gaining inclusion onto the watch list this year.However, market experts remained pessimistic over whether the plan will proceed smoothly, as foreign investors still express a series of complaints while trading Korean stocks ― such as the partia

Jan 27, 2022By Lee Min-hyung
Hurdles remain for MSCI developed market status
Economy

LG Energy Solution debuts after $13 trillion frenzy in Korea's biggest IPO

The logo of LG Energy Solution is pictured at its office building in Seoul, Nov. 23, 2021. Reuters-Yonhap Shares of battery maker LG Energy Solution (LGES) debuted Thursday after South Korea's biggest-ever initial public offering (IPO) attracted bids worth $13 trillion, underscoring upbeat prospects for the electric vehicle industry.LGES priced its 12.8 trillion won ($10.7 billion) IPO at the top of the range, becoming Korea's third most-valuable company after Samsung Electronics and SK hynix with a nearly $60 billion market valuation.Spun out of LG Chem, the company commands more than 20% of the global EV battery market and supplies Tesla, General Motors and Volkswagen among others.It sold its shares in the offering at 300,000 won each.Its trading debut will set the tone for upcoming IPOs in South Korea as retail investors ― known as "ants" ― have flocked to the stock market with liquidity aided by the government's stimulus policy during the COVID-19 pandemic."It i

Jan 27, 2022
LG Energy Solution debuts after $13 trillion frenzy in Korea's biggest IPO
Economy

Korea to take market-stabilizing steps if needed: official

Trader John Bishop works on the trading floor, Jan. 26, in this photo provided by the New York Stock Exchange. AP-Yonhap The government plans to take measures to stabilize the country's financial market when needed, a senior official said, after the Federal Reserve signaled a rate hike in March to tame inflation.The finance ministry assessed the Fed's monetary policy stance as hawkish, but it said the outcome of the U.S. central bank's latest rate-setting meeting is expected to have a limited impact on the Korean market.Fed chief Jerome Powell said Wednesday (local time) that it has "quite a bit of room" to hike the federal funds rate to fight inflation after the Fed left the rate unchanged near zero at its two-day policy meeting.The Fed is also expected to end its bond-buying pandemic-stimulus program in March and later launch the reduction of its asset holdings."The global financial market showed limited volatility overnight and Korea's economic fundamentals remai

Jan 27, 2022
Korea to take market-stabilizing steps if needed: official
  • Fed plans to raise rates starting in March to cool inflation
Economy

Korea Federation of Banks chief warns of cyber risks amid digitalization

Korea Federation of Banks (KFB) Chairman Kim Gwang-soo speaks during an online conference held at the KFB headquarters in Seoul, Thursday. YonhapKim asks presidential candidates to rectify 'uneven playing field' between banks and big tech firmsBy Yi Whan-wooCyber risks could be a “gray rhino” for banks on their paths for digital transformation, and they should take preventive measures, just as they do concerning other forthcoming financial risks, Korea Federation of Banks (KFB) Chairman Kim Gwang-soo said Wednesday.The head of the KFB also asked presidential candidates to rectify “the uneven playing field” between commercial banks and big tech companies in their campaigns for the March 9 presidential election.Kim called on the need to open the door wider for lenders to advance into non-banking sectors, and to open up access to them to non-financial data in the government-led MyData project.“The banking industry should be ready to counter 'gray rhinos,' as has been recently indicated by the financial regulator, and in relation to that, cyber risks should

Jan 26, 2022By Yi Whan-woo
Korea Federation of Banks chief warns of cyber risks amid digitalization
Economy

Guidelines for financial platform businesses

FSS Governor Jeong Eun-bo speaks at a meeting with representatives of financial platform businesses held in Seoul, Wednesday. Jeong said that supervision guidelines for financial platform businesses will be set up under the principle that the same regulations should apply to both IT companies and traditional financial businesses, as long as they are engaged in the same functions. Yonhap

Jan 26, 2022By Yoon Ja-young
Guidelines for financial platform businesses
Economy

Inflation concerns loom large

A traditional market in Daegu is crowded with shoppers this week, with just days remaining before the Lunar New Year long weekend, which runs from Jan. 31 to Feb. 2. YonhapGlobal price hike in oil, raw materials, shipping add to consumers' woeBy Yi Whan-wooA woman in her 70s, surnamed Park, is increasingly switching to lower-cost brands when she goes grocery shopping, because she finds it tough to cope with surging food prices while her family's income remains unchanged.“This is the least I should do, because you can't stop buying everyday essentials just because their prices are rising fast,” she said.Park's case illustrates inflation-pinched shoppers, whose earnings are stagnant or falling amid a steep increase in the prices of oil, raw materials and shipping worldwide.The three collectively add to worsening global inflation brought forth by the COVID-19 pandemic, which according to Nobel-Prize winning economist Paul Krugman is at its highest “in almost 40 years.”Global oil prices rose more than 55 percent over the past year, with the primary benchmarks hitt

Jan 26, 2022By Yi Whan-woo
Inflation concerns loom large
Economy

Small investors deserting local stock market

Retail investors stage a protest in front of the building of the Korea Exchange in Seoul, Jan. 18, calling for the resumption of drugmaker SillaJen stock trading. YonhapBy Lee Min-hyungThe Korean stock market is losing trust from local retail investors, as they feel increasingly burdened by the unexpected ups and downs of even some promising large-cap stocks, they said Wednesday.The benchmark KOSPI gained rare momentum for a rally in 2020 on the pandemic-sparked liquidity expansion, but is showing signs of losing steam in recent weeks. This has sparked fears among individual investors, rekindling the long-held distrust of the local stock market. The main bourse reached a record high of 3,300 points back in June 2021, but fell to below the 2,800-mark as of Wednesday.The rise of mobile platforms also made it easier for them to transfer their capital into U.S. stocks, which they picked as another key reason behind the money transfer.“Retail investors did not have enough knowledge on how to invest in U.S. stocks, but this is not the case anymore particularly among tech-savvy young

Jan 26, 2022By Lee Min-hyung
Small investors deserting local stock market
Economy

Contribution Future of Chinese growth and implications for Korea

Pushan Dutt By Pushan DuttWhen economists talk of growth miracles, they refer to countries that grew rapidly and caught up with the level of the development of the U.S. Korea, among others, is the poster child of growth miracles. In 1950, Korea's per capita GDP was 6 percent of the U.S. Today that number is 71 percent. China's growth take-off started three decades later, and despite the vast differences in size, the two growth trajectories are nearly inseparable (see graph below). China's catch-up has lifted vast numbers out of dire poverty and is one of the finest achievements in the history of economic development. Going forward, will China follow Korea's trajectory, or will a confluence of policy shifts, geopolitical conflicts, and demographic constraints ensnare it in the dreaded Middle-Income Trap? The middle-inco

Jan 26, 2022By Lee Kyung-min
[Contribution] Future of Chinese growth and implications for Korea
Economy

IMF revises down economic growth outlook for Korea to 3 percent in 2022

In this September 2018 file photo, the International Monetary Fund (IMF) logo is displayed outside their headquarters building in Washington, U.S. Reuters-YonhapBy Yoon Ja-youngThe International Monetary Fund (IMF) lowered its growth outlook for Korea this year by 0.3 of a percentage point to 3 percent, from its previous estimate, citing the impact of the spread of the Omicron variant and the pessimistic outlook for the U.S. and China, which are Korea's key trade partners.In its World Economic Outlook Update released Tuesday, the Washington-based IMF expected the global economy to grow 4.4 percent this year, which is down 0.5 of a percentage point from its previous estimate released in October 2021. “The global economy enters 2022 in a weaker position than previously expected. As the new Omicron COVID-19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging markets and developing economies,” it noted

Jan 25, 2022By Yoon Ja-young
IMF revises down economic growth outlook for Korea to 3 percent in 2022
Economy

Korean economy expected to weather fallout from Omicron

Asia's fourth-largest economy expands at fastest pace in 11 yearsBy Yi Whan-wooThe Korean economy is expected to continue its recovery in the first quarter of 2022 despite the spread of the Omicron variant, as it is becoming more resilient to the fallout of the COVID-19 pandemic, according to multiple analysts, Tuesday. Omicron will remain a stumbling block, but even so, it should not put a major drag on the momentum of recovery, the experts said. They noted that its economic impact is limited and that the government, with the presidential election coming on March 9, will remain supportive of pandemic-stricken households and businesses in terms of fiscal policy.The optimistic outlook for the January-March period came after the Bank of Korea (BOK) reported Tuesday that Korea's economy had expanded 4.0 percent in 2021 ― the country's fastest growth in 11 years, since expanding 6.8 percent in 2010.The nation's GDP grew 1.1 percent in the October-December period, a major turnaround from the third quarter's meager 0.3 percent expansion. The fourth-quarter GDP boosted Asia's fourth-largest

Jan 25, 2022By Yi Whan-woo
Korean economy expected to weather fallout from Omicron
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