The Bank of Korea is expected to freeze its key base rate at the monetary policy committee meeting this week.However, it will likely face pressure to lower the key interest rate next month as deflation concerns further deepen, analysts said.BOK Gov. Lee Ju-yeol had indicated that the central bank would have to keep household debt in check following an increase in bank borrowing fueled by low interest rates, hinting that it may keep its rate steady this month.The central bank recently formed a co

March 10, 2015

The government will frontload a part of its policy fund in an effort to revive the economy this year amid low consumer prices, industrial production and wage growth.The Ministry of Strategy and Finance said Monday that it would inject 10 trillion won into the market out of 15 trillion won remaining in the 46 trillion won policy fund.Media reports indicated that it would spend 10 trillion won by the first half of this year.However, the Finance Ministry did not give a specific timeline and said in

March 9, 2015

The Bank of Korea said Thursday that South Korea’s foreign currency liquidity remained fundamentally sound with a slight increase in short-term foreign debt last year.However, the rise in external debt with a maturity of less than a year was not severe enough to trigger concerns over the soundness of the country’s foreign portfolio.The short-term foreign debt increased by $3.5 billion to $115.3 billion at the end of last year, accounting for 27 percent of the total external liability of $425.4 b

March 5, 2015

South Koreans’ credit card spending reached 48.4 trillion won ($44 billion) last month, up 3 percent from the same period a year ago, the Credit Finance Association said Thursday.This marked the second-lowest increase since February last year, when credit card spending grew 2.5 percent on-year. In January 2014, the increase rate stood at 9 percent.CREFIA attributed the low increase to less overall spending in January as the Lunar New Year holiday was in February this year.This led to less retail

Feb. 26, 2015

Bank of Korea Gov. Lee Ju-yeol said Wednesday that uncertainty remains for the Korean economy as it is difficult to predict when the U.S. Federal Reserve would start to raise interest rates.In a meeting with economists and researchers, the country’s top monetary policymaker said the Fed calmed the global market by saying that it remained patient in raising rates.At the same time, the U.S. central bank’s statement increased uncertainty, making it much more difficult to predict its monetary policy

Feb. 25, 2015

The Bank of Korea said Monday it would reset its mid-term inflation target range sometime in the second half of this year, while reiterating that it would maintain its monetary easing for the time being.In a policy briefing to the National Assembly’s Strategy and Finance Committee on Monday, BOK Gov. Lee Ju-yeol said that a new target for 2016-2018 would be established after reviewing economic conditions.“We will seek an inflation target for 2016 (to 2018) that reflects the changing economic con

Feb. 23, 2015

The Ministry of Strategy and Finance said Monday it would expand the scope of its tax incentives for conglomerates in line with efforts to induce them to increase investments, dividends and employees’ wages.The ministry said companies that increased investments to expand headquarters as well as production, retail and sales facilities would be exempted from paying related taxes.Spending on infrastructure such as warehouses, logistics centers and training institutes for employees will also be reco

Feb. 16, 2015

The International Monetary Fund said Friday that the South Korean economy faces numerous downside risks to growth, forecasting a weaker-than-anticipated outlook for this year.Korea’s aging population, unsustainable reliance on manufacturing for growth, vulnerable household debt levels especially among low-income earners and weak consumer expectations are some of its domestic challenges.A prolonged weak Japanese yen, rising global deflation on the back of falling oil prices and weak growth outloo

Feb. 13, 2015

South Korea’s consumer inflation rate fell below that of the average of the G7 economies last year for the first time in eight years, according to data by the Organization for Economic Cooperation and Development.Korea’s annual inflation rate stood at 1.3 percent last year, compared to the G7 average of 1.6 percent. The G7 economies are the U.S., Japan, the U.K., France, Germany, Italy and Canada.Korea’s inflation rate also fell below the G7 average in 1999 and 2006.Falling global oil prices and

Feb. 12, 2015