South Korea’s central bank’s unprecedented decision to extend loans to brokerages and other nonbanking institutions will help them avoid the worst amid an economic crisis brought on by the novel coronavirus, experts said Friday. The Bank of Korea announced Thursday that it planned to launch a special loan program worth 10 trillion won ($8.1 billion), which would allow local banks, brokerages and insurers to borrow funds for up to six months against collateral from the central bank

Economy April 17, 2020

South Korea’s central bank has decided to launch a new loan program for brokerages, temporarily broadening its range of collateral to corporate bonds, officials said Thursday. The move aims to provide cushion for the local market, which has been struggling to deal with the economic fallout of the new coronavirus. Under the program worth 10 trillion won ($8.1 billion), local brokerages and nonbanking financial institutions including brokerages and insurers will be allowed to borrow funds

Economy April 16, 2020

The ruling Democratic Party of Korea’s landslide victory in the latest national assembly elections is expected to work as a catalyst for President Moon Jae-in’s economic policy agenda -- including more emergency cash handouts and housing market regulations. Thursday’s preliminary election results allowed the Democratic Party and its satellite Platform Party to secure 180 seats in the 300-member National Assembly, which is likely to expand the scope of the government's e

Economy April 16, 2020

Slammed by the novel coronavirus, South Korea’s labor market is shrinking fast, sparking concerns over its impact on consumer spending and the possibility of a sharp recession. Total payouts for state unemployment benefits hit a record high of nearly 900 billion won ($738 million) in March, data released by the Ministry of Employment and Labor showed Monday. The figure had jumped by a whopping 40.4 percent on-year, affected by the risks stemming from the COVID-19 crisis. The number of

Economy April 14, 2020

South Korea’s central bank is awaiting government signoff on an emergency program that would extend loans to nonbanking institutions, sources said Sunday, as both monetary and fiscal authorities aim to further funnel liquidity into the markets to counter the effects of the novel coronavirus. “We are currently preparing to launch an emergency lending program as swiftly as possible,” a Bank of Korea official said. The program -- which is expected to mirror actions taken by t

Economy April 12, 2020

South Korea’s central bank on Thursday decided to freeze its policy interest rate at 0.75 percent, hinting its willingness to review the effects of last month’s big rate cut coupled with quantitative easing efforts. Following a monetary policy board meeting earlier in the day, the Bank of Korea decided to keep its base rate steady after it slashed it by half a percentage point to a record low on March 16. It was the first emergency rate cut in more than a decade to combat the risk

Economy April 9, 2020

South Korea’s household and corporate debts saw unprecedented growth last month, data from financial authorities showed Wednesday, as risks stemming from the novel coronavirus continue to weigh on the economy. Bank loans extended to local households, including state-backed mortgage loans, increased by 9.6 trillion won ($7.88 billion) on-month to 901.9 trillion won, the Bank of Korea said. It is the highest figure since the BOK started keeping records on household debt in 2004. The corr

Economy April 8, 2020

South Korea’s national debt last year surpassed 1,700 trillion won ($1.39 trillion) for the first time, weighed down by increased treasury bond issuance coupled with the government’s consequent fiscal expansion, a government report showed Tuesday. The national debt jumped 60.2 trillion won on-year to 1,743.6 trillion won as of end of 2019, according to the annual national financial report reviewed and endorsed by the Cabinet. The Cabinet meeting was presided by Prime Minister Chung

Economy April 7, 2020

South Korea’s 10 financial holding groups’ combined net profit increased 31 percent last year, data showed Monday, but the upward trend is unlikely to continue next year. According to the watchdog Financial Supervisory Service, the combined net profit of Shinhan, KB, NH Nonghyup, Hana, Woori, BNK, DGB, JB, Korea Investment and Meritz came to 15.2 trillion won ($12.3 billion) in 2019. The figure was up nearly 3.6 trillion won or 31 percent on-year. The corresponding figure for 201

Market April 6, 2020

The government decided Friday to make emergency cash payments to households in the bottom 70 percent income bracket, financially hit by the novel coronavirus, by using March health insurance premiums as key standard. The temporary, yet controversial scheme will provide 1 million won ($814) each to four-person households with salaried workers that paid March premiums below 237,000 won, according to the government. Though the households’ March insurance payments stand as a common standar

Economy April 3, 2020

South Korea’s central bank on Thursday funneled around 5.2 trillion won ($4.2 billion) of liquidity to the financial markets shaken by the novel coronavirus, through its first round of auctions held in conjunction with its “unlimited” repo operations. The Bank of Korea last week, in an unprecedented move, vowed to inject more liquidity into the market over the next three months through a repurchase agreement or repo operations, allowing securities to be sold and then repurch

Economy April 2, 2020

South Korea’s top fiscal chief proposed more currency swap deals at a key G-20 meeting to help tackle the impending global economic recession, the Ministry of Economy and Finance said Wednesday. Deputy Prime Minister and Finance Minister Hong Nam-ki’s remarks were made during a virtual meeting of the G-20 finance ministers and central bank governors on Tuesday. According to the ministry, Hong also stressed the need for reforms of the International Monetary Fund framework to

Economy April 1, 2020

Six major banks in South Korea paid a combined 4.7 trillion won ($3.86 billion) in dividends to shareholders last year, which was nearly 20 percent up from the previous year, their annual reports showed Tuesday. The total dividend payouts by KB Kookmin, Shinhan, Woori, Hana, Standard Chartered Bank Korea and Citibank Korea in 2019 marked the largest amount since 2016. Comparable data was only available from 2016 as the current Hana Bank was a result of a 2015 merger between Hana Bank and Korea

Market March 31, 2020

South Korea’s regional economies have noticeably shrunk in the first quarter due to the coronavirus pandemic, with epicenters of the outbreak hit worst, a Bank of Korea report showed Monday. According to the nation’s central bank, “Regional economies of Daegu and both Gyeongsang provinces shrunk marginally in the first quarter of the year, while the Seoul metropolitan area and others also saw a contraction compared with the previous quarter.” All provinces and areas s

Economy March 30, 2020

Bolstered by the government’s decision to double its economic rescue package to 100 trillion won ($82.5 billion), coupled with the central bank’s promise of unlimited quantitative easing, South Korea appears to have evaded a financial disaster for now. But a bigger task awaits, according to experts: preventing the risks stemming from the novel coronavirus from dragging down the real economy. Officials and experts alike have stressed the need for closer attention to the nonfinanc

Economy March 29, 2020