South Korea’s current snowballing budget deficit, fueled by the COVID-19 pandemic “can be offset by gradual consolidation” in coming years, the International Monetary Fund said Thursday. The remark by Andreas Bauer, Korea mission chief at the IMF, apparently aims to alleviate concerns surrounding the nation’s government debt surged by four rounds of supplementary budgets implemented to finance COVID-19 relief programs. The sovereign debt is projected reach 956 trillio

South Korea’s economy shrank 1 percent in 2020 from the previous year, due to blows dealt by the COVID-19 pandemic, marking its first contraction since it was hit by the devastating 1997 Asian financial crisis more than two decades ago, the central bank said Tuesday. The 1 percent contraction in the country’s gross domestic product was slightly better than the Bank of Korea’s earlier projection of minus 1.1 percent in November, its advanced data showed. Yet, it was one of its

President Moon Jae-in on Monday called for his administration to seek institutionalized measures that could financially aid small businesses and the self-employed hit by the COVID-19 pandemic. “I hope the government and the ruling Democratic Party will jointly discuss measures to institutionalize compensation for the losses of small business owners and the self-employed within a range that the state budget can afford,” he said to pool reporters in a meeting tied to briefings from l

South Korea’s leading commercial banks are seeking ways to accelerate digitalization of their retail services with some even breaking down traditional barriers between new industry rivals in order to share ideas on boosting innovation. Kakao Bank CEO Yoon Ho-young was invited by Woori Bank on Friday to speak about the internet-only banking giant’s success and the future of finance, Kakao Bank said. Woori’s invitation of the head of the fast-growing online banking company is

South Korea plans to invest 1.1 trillion won ($1 billion) for commercialization of Level 4 autonomous driving technology, Finance Minister Hong Nam-ki said Thursday, while highlighting the increasing competition in the self-driving car sector driven by global firms like Apple. “With reports of Apple’s plans to enter the future car market, talks of cooperation between big tech firms and traditional carmakers have been growing,” Hong said in a meeting of economy-related officia

South Korea’s financial authorities said Wednesday they plan to adopt stricter guidelines, regulations and monitoring for foreign exchange trading by local non-banking institutions such as brokerages and insurers. “Three types of new monitoring standards will be adopted to keep an eye on forex liquidity in non-banking financial institutions,” Deputy Prime Minister and Finance Minister Hong Nam-ki said in a press briefing. “We will improve the effectiveness of the monit

The rising US Treasury yields has become a “key variable in the global foreign exchange market,” South Korea’s vice finance minister said Tuesday, nodding towards a stronger dollar trend that has rattled emerging market currencies. “When the 10-year US Treasury yield surpassed the 1 percent mark (earlier this month), the Euro, the Japanese Yen and the Chinese Yuan all dropped against the US greenback,” Vice Finance Minister Kim Yong-beom said in a macroeconomic fin

South Korea plans to kick off a 4.1 trillion won ($3.7 billion) emergency cash handout program Monday to offer up to 3 million won to small business owners, freelancers and special contract laborers hit by the third wave of coronavirus here, the Finance Ministry said Sunday.　 Roughly 2.5 million small business owners and self-employed individuals, or almost 90 percent of the country’s total, are eligible for the cash subsidies. They will be notified via text messages that they have been c

Top foreign investment banks, including Goldman Sachs, JP Morgan and HSBC, have upgraded South Korea’s growth outlook for this year to an average 3.4 percent, up by 0.1 percentage point from their previous estimate, a report released by the Korea Center for International Finance showed Thursday.  By end-December, two of nine investment banks surveyed in the report -- Credit Suisse and HSBC -- had revised their outlook upward by 0.7 percentage point and 0.5 percentage point to 3.6 per

South Korea’s Finance Ministry said Wednesday that it has no plans to raise taxes on gasoline and diesel this year, despite its vows to go carbon neutral by 2050, and hinted that it will likely maintain the inheritance tax at its current level. In a briefing on the revised taxation rules previously announced in July, Im Jae-hyun, a senior official at the Ministry of Economy and Finance, said the government “currently has no plans to adjust the transportation-energy-environment tax

South Korea’s monetary policy chief on Tuesday called for the nation to brace for potential risks stemming from the financial authorities’ decision last year to funnel massive liquidity into the market and extend loan forbearance periods, due to the COVID-19 pandemic. “We must focus on risk management and accelerating innovation, and debt issues and the excess flow of capital into the asset markets – which are the side effects of the coronavirus crisis – need to b

      The coronavirus pandemic has accelerated the digitalization of the financial industry, pushing local banking groups to cater services to require less contact. The heated competition to gain a digital foothold in the industry pose as a key task for the firms this year, experts and head of the groups said Monday. “Local banks must bolster their risk management, while seeking for fresh revenue sources in the era of near-zero interest rates and improve the com

Despite heightened hopes that vaccinations would put an end to the still ongoing pandemic in the new year, the South Korean economy is expected to face another series of challenges, uncertainties and risks. The COVID-19 pandemic was the biggest threat to Asia’s fourth-largest economy last year, dragging down its GDP in the second quarter to minus 3.3 percent, the lowest since the 1997-98 Asian Financial Crisis when the country went through massive restructuring nationwide. Reflecting c

The COVID-19 pandemic is projected to add fuel to South Korea’s low birthrate, marriage rate and rapidly increase the nation’s aging population, the central bank said Wednesday. “The pandemic will have a negative impact on the nation’s marriage and birthrate, leading to an acceleration of aging in the population,” the Bank of Korea said in its regular report on economic issues. The total fertility rate for 2022 may even become lower than the Statistics Korea&rsq

South Korea’s central bank said Tuesday that it had published an English-language version of a booklet narrating its 70-year history. The Korean version was published in June to mark the Bank of Korea’s 70th anniversary. The booklet focuses on Korea’s growth into Asia’s fourth-largest economy, as well as on the establishment of the BOK and its role, the central bank said. The BOK plans to distribute the booklet to its overseas counterparts, international organizatio

South Korea selected a total of 11 banks –- six South Korean and five foreign banks –- as institutions responsible for setting prices for direct won-yuan transactions next year, financial authorities said Monday. The banks will be responsible for determining the prices for the transactions and funneling liquidity into the market, the Ministry of Economy and Finance and the Bank of Korea said in a joint statement. The South Korean banks are major commercial lenders KB Kookmin, Shi

K-pop boy band BTS stars in KB Kookmin Bank’s advertisement for Indonesia, with its megahit song “Dynamite” playing in the background, in this screen capture of the commercial released by the lender on Monday.  BTS has been KB Kookmin's global ambassador since 2018. KB Kookmin has been expanding its presence in Indonesia in recent years and has so far acquired a 67 percent stake in Bank Bukopin, making it the largest shareholder. By Jung Min-kyung (mkjung@heraldcorp.com)

As China accelerates the development of its sovereign digital currency, South Korea should prepare for looming changes that the new form of money may bring about to its largest trading partner, experts had said as of Sunday. China has been intensifying its efforts to introduce the digital yuan, known officially as the Digital Currency Electronic Payment, with the second round of its pilot program launched earlier this month for testing on major e-commerce platforms like JD.com, the country&rsq

The Industrial Bank of Korea joined hands with a platform operated by Naver’s cloud affiliate for digital innovation and development of fintech services, the state-run bank said Wednesday. The new partnership will enable them to bolster their cloud and artificial intelligence capabilities, IBK said. To keep pace with each other, both plan to establish a solid communication channel to review Naver’s technologies capable of upgrading banking business. Discovering and recommending

KB Kookmin Bank, one of five major commercial banks here, has decided to cap the size of personal loans per household to 20 million won ($18,000), sources said Tuesday, marking a drastic move as local lenders have been tightening their grip on lending rules. KB Kookmin plans to maintain the new limit at least until the end of the year, industry sources said. The rule applies to any household that would apply for a new personal loan or seek to increase their loan balance from Tuesday to Dec. 31