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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

Seoul stocks dip to nearly 14-month low

A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, Jan. 25. Korean stocks tumbled to an almost 14-month low Tuesday as investors brace for hawkish comments from the U.S. Federal Reserve. AP-Yonhap Stocks on local markets tumbled to an almost 14-month low Tuesday as investors brace for hawkish comments from the U.S. Federal Reserve. The Korean won also lost against the dollar.The benchmark KOSPI plunged 71.61 points, or 2.56 percent, to close at 2,720.39, its lowest level since Dec. 8, 2020 when it closed at 2,700.93.Trading volume was moderate at about 630 million shares worth some 11.5 trillion won ($9.6 billion), with losers outnumbering gainers 862 to 55.Foreigners dumped a net 463 billion won worth of stocks and institutions offloaded 171 billion won, while retail investors bought 586 billion won.After a weak start, the KOSPI plummeted quickly amid a massive foreign sell-off.Stocks extended their l

Jan 25, 2022
Seoul stocks dip to nearly 14-month low
Economy

KRX highlights need for full resumption of short-selling

Korea Exchange (KRX) Chairman and CEO Sohn Byung-doo speaks during a press conference held at the Seoul office building of the KRX in Yeouido, Tuesday. Courtesy of KRXBy Anna J. Park Korea Exchange (KRX) Chairman and CEO Sohn Byung-doo stressed the need to fully allow short-selling for all listed stock items, if the local stock markets aim to be included in MSCI's Developed Markets Index.“If the Korean stock market wishes to step forward as an advanced capital market, it is necessary for the local stock markets to allow short-selling full-scale,” the KRX chief said during a press conference held on Tuesday. The country's financial authority banned short-selling for all listed stocks in March 2020 amid the KOSPI's crash due to the shock of the pandemic outbreak. Short-selling has since resumed partially last May on large- and mid-cap sized companies included in the KOSPI 200 and Kosdaq 150 indices.Yet, Sohn added that close consultation with the country's financial authorities is a prerequisite for the resumption of short-selling, saying that the full resumption of short-s

Jan 25, 2022By Anna J. Park
KRX highlights need for full resumption of short-selling
Economy

PEF market forecast to continue growth in coming years

MBK Partners' exit from Doosan Machine Tools second-largest deal in 2021By Kim Bo-eun The local market for mergers and acquisitions (M&A) has grown over the years, and so has private equity firms' (PEF) role in related deals. The market for PEFs is projected to continue to expand in coming years, backed by continuous opportunities in the M&A market, the emergence of new PEF players and the government's market-friendly stance.Data from consulting firm Bain & Company shows PEFs were involved in 85 percent of the 20 largest M&A deals in the local market last year, up from 65 percent in 2019. The exit value of PEFs also reached the highest yet in 2021, standing at $21.2 billion.MBK Partners' sale of Doosan Machine Tools to DTR Automotive was the second-highest value deal in the local M&A market last year. This was followed by Kohlberg Kravis Roberts & Co. (KKR)'s investment in SK E&S' redeemable convertible preferred stock. SoftBank Investment Advisors becoming Yanoljia's second-largest shareholder was the fifth-la

Jan 25, 2022By Kim Bo-eun
PEF market forecast to continue growth in coming years
Economy

Korea to improve FX market system to win MSCI developed market status

gettyimagesbank Korea said Tuesday it plans to improve the foreign exchange market system to better ensure foreign investors' market access as it seeks to win developed market status from Morgan Stanley Capital International (MSCI).To this end, the government is considering extending the FX market operating hours and permitting foreign financial institutions to directly take part in the interbank FX market. It is also mulling easing regulations on offshore transactions of the Korean won."The government will take into account ways to enhance foreign investors' market access and stabilize the FX market," Finance Minister Hong Nam-ki said at a meeting on external economic policy.MSCI has classified the Korean stock market for years as an emerging market, saying the absence of an offshore currency market for the Korean won is one of the main reasons for its decision.In November last year, the government said it will push again to win the MSCI developed market status, wi

Jan 25, 2022
Korea to improve FX market system to win MSCI developed market status
Economy

Economy grows 4% in 2021, highest in 11 years

gettyimagesbank South Korea's economy is estimated to have grown 4 percent in 2021, marking the highest growth rate in 11 years, central bank data showed Tuesday.The growth was higher than a 0.9 percent contraction tallied a year earlier when the country suffered from slumping spending and exports amid the coronavirus pandemic, according to the data from the Bank of Korea (BOK).The growth rate marked the highest since 2010, when the economy expanded 6.8 percent. It also met the central bank's annual growth outlook of 4 percent. For the fourth quarter of last year, the economy is estimated to have grown 1.1 percent, accelerating from the previous quarter's 0.3 percent gain, the data showed.Rebounding consumption and exports drove the annual growth rate higher. Private consumption expanded 3.6 percent last year, turning around from the previous year's 5 percent contraction. Facility investment gained 8.3 percent, compared with a 7.1 percent advance tallied a year earl

Jan 25, 2022
Economy grows 4% in 2021, highest in 11 years
Economy

State pension's plan to strengthen lawsuit rights unnerves businesses

Conglomerates fear NPS abusing right to file lawsuits By Lee Min-hyungKorea's state pension fund, one of the largest in the world with around 918 trillion won under management, plans to strengthen its ability to file lawsuits against corporate management officials and boards of directors in order to exercise stronger rights to intervene in the management activities of major listed firms here.The move, however, has been making businesses feel increasingly uncomfortable.The National Pension Service (NPS) plans to do this by giving its external committee ― comprised of officials from labor and civic groups ― the authority to file shareholder derivative suits against local companies. The NPS plans to discuss shifting this authority to the organization from its fund management committee, at an upcoming meeting next month.The plan has drawn strong backlash from businesses here, with industry officials arguing the move will end up destabilizing the economy and weakening the autonomy of companies.There are concerns that the labor-backed committee will file a litany of lawsuits armed with its

Jan 25, 2022By Lee Min-hyung
State pension's plan to strengthen lawsuit rights unnerves businesses
Economy

Korean stocks tumble after declines on Wall Street

An electronic board set up at a dealing room of Hana Bank in Seoul indicates stock falls on Monday. The benchmark KOSPI closed down 1.49 percent at 2,792, the lowest level in 13 months. YonhapStock bubble feared to burst on rate hikes: overseas expertsBy Lee Min-hyungThe Korean stock market tumbled Monday in the wake of Wall Street's fall last week stoked by jitters over the Fed's looming rate hikes, analysts said Monday.As expected, the benchmark KOSPI and junior Kosdaq extended losses as foreign and retail investors went on a selling spree. The main bourse closed at 2,792 points, down 1.49 percent or 42.29 points from the previous session, which was the lowest level since Dec. 23, 2020, while the tech-heavy Kosdaq dipped by nearly 3 percent or 27.55 points to finish at 915.40.This escalated fears that the Korean stock market has entered a bear phase after ending a bull run that continued for the past two years after the outbreak of the COVID-19 pandemic in early 2020. Analysts also sent a series of warnings to the market, saying that U.S. stocks are approaching the end of a “

Jan 24, 2022By Lee Min-hyung
Korean stocks tumble after declines on Wall Street
Economy

Extra budget feared to lead to rate hikes, inflation, burdening vulnerable

Business owners set to be affected by rising lending rates, consumer pricesBy Kim Bo-eunFinance Minister Hong Nam-ki speaks about the government's 14-trillion-won ($11.7 billion) extra budget plan at the Seoul Government Complex, Jan. 21. NewsisThe government is drawing up another 14 trillion won ($11.7 billion) budget to support small business owners afflicted by the COVID-19 pandemic, but ironically, it is feared that the extra budget will add yet more of a burden to affected households and businesses, as the situation is set to trigger a rise in lending rates as well as consumer prices.The extra budget will be used to provide 3 million won to 3.2 million small business owners who have been hit by the effects of the COVID-19 pandemic and ongoing social distancing measures on businesses. The government is seeking to issue 11.3 trillion won in debt to finance the 14-trillion-won budget, which will be done by issuing government bonds.The situation has led to a rise in treasury bond yields. The three-year treasury bond yield rose 0.091 of a percentage point on Jan.14, when the governme

Jan 24, 2022By Kim Bo-eun
Extra budget feared to lead to rate hikes, inflation, burdening vulnerable
Economy

Number of 'discouraged workers' in Korea hits new high in 2021

gettyimagesbankThe number of “discouraged workers” in Korea touched a fresh all-time high in 2021 due to a weak job market amid the prolonged coronavirus pandemic, government data showed Monday.Asia's fourth-largest economy had 628,000 discouraged workers, the largest tally since related tracking began in 2014, according to the data from Statistics Korea.Discouraged workers refer to those who are currently unemployed and have not sought to find jobs in the last four weeks due to no suitable job options or other reasons, though they are eligible for employment and are willing to work, with the experience of having looked for jobs in the past year.The increase in the number of such workers is widely seen as resulting from the flaccid labor market because of the fallout from the COVID-19 outbreak.The data also showed the number of unemployed Koreans who sought to find jobs for six months or longer standing at 128,000 last year, up 8.1 percent from 2020 and switching to an upturn after three years.Long-term unemployed Koreans in their 20s and 30s numbered 65,000, accounting f

Jan 24, 2022
Number of 'discouraged workers' in Korea hits new high in 2021
Economy

Korea decides to offer $250 mil. in low-interest loans for Egypt's railway project

Export-Import Bank of Korea /YonhapThe state-run Export-Import Bank of Korea said Sunday it has decided to offer US$250 million in low-interest loans to support Egypt's national railway modernization project.The loans from the Economic Development Cooperation Fund (EDCF) will support a part of the project to upgrade the traffic signals of a railway line linking Luxor and High Dam, the bank said.Last week, South Korea and Egypt inked a memorandum of understanding to raise the limit of the EDCF loans to Egypt to $1 billion in 2022-26 from the previous $700 million, in an effort to deepen bilateral cooperation.South Korea launched the EDCF program in 1987 with the purpose of supporting economic and social infrastructure projects in developing countries. (Yonhap)

Jan 23, 2022
Korea decides to offer $250 mil. in low-interest loans for Egypt's railway project
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