Britain and South Korea have agreed to extend a period of low or zero tariffs on bilateral trade of products with parts from the European Union, the British government said on Monday, in a boost for the car industry, Reuters reported. Without the two-year extension, British businesses would have faced high tariffs from Jan. 1 on exports of products made using EU components, under so-called rules of origin, and on products shipped via the EU.
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South Korea’s inflation outstripped forecasts in August partly on the back of higher energy costs, reinforcing the case for the central bank to keep the door open to further policy tightening to rein in prices, Bloomberg News reported. Consumer prices advanced 3.4% from a year earlier, quickening from 2.3% in July, the statistics office reported Tuesday. The Bank of Korea is keeping its options open for potential rate hikes until it’s confident price pressures are well under control.
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Less than a year after a debt crisis shook South Korea, concern is growing that souring lending at credit unions risks bringing back distress, Bloomberg News reported. A branch of one of Korea’s biggest such lenders, MG Community Credit Cooperatives, was shut last month when it reported a 60 billion won ($45 million) loss on real estate-related loans. That triggered deposit outflows at the group of lenders on concerns over rising default rates.
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Less than a year after a debt crisis shook South Korea, concern is growing that souring lending at credit unions risks bringing back distress, Bloomberg News reported. A branch of one of Korea’s biggest such lenders, MG Community Credit Cooperatives, was shut last month when it reported a 60 billion won ($45 million) loss on real estate-related loans. That triggered deposit outflows at the group of lenders on concerns over rising default rates.
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South Korea's producer prices fell in June on an annual basis for the first time in 31 months, central bank data showed on Friday, dragged down by petroleum and agricultural products, Reuters reported. The producer price index was 0.2% lower in June than the same month the year before, after a rise of 0.5% in May, according to the Bank of Korea (BOK). The index showed annual increases every month from December 2020 and during the streak it once hit a 14-year high of 10%. Officials at the BOK remain cautious about whether the annual declines will continue.
A tentative rebound in the South Korean won may get an additional tailwind in the second half of the year thanks to the global boom in artificial intelligence, Bloomberg reported. That’s expected to boost exports of Korean semiconductors, which in turn will help improve the country’s terms of trade. Analysts from Goldman Sachs Group Inc., HSBC Holdings Plc and Nomura Holdings Inc. have touted a turn in the chip cycle as a plus for the won in recent research with the latter specifically mentioning the secular AI investment theme in a note last month.
South Korea's financial services regulator has asked major commercial banks to prepare around $4 billion in financing to support a credit cooperative hit by customer withdrawals, Reuters reported. An official at the Financial Services Commission said it could not confirm the amount or other details, but it had asked the banks for cooperation in preparing liquidity through repurchase-agreement facilities to aid MG Community Credit Cooperatives (MGCCC). "(Authorities) are closely monitoring the liquidity of MGCCC," the official said, declining to be named due to the sensitivity of the matter.
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South Korea's factory activity shrank at a steeper pace in June and extended its downturn to a record 12th consecutive month, a survey showed on Monday, underlining the challenges facing the economy as it struggles to mount solid recovery, Reuters reported. The survey result comes in stark contrast to other brighter signs of recoveries in the country's output and exports, suggesting manufacturers' downbeat sentiment and weak business conditions might take a while longer to turn a corner.
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Two crypto lenders with links to South Korea halted withdrawals in quick succession, a reminder of lingering risks even after regulators around the world tightened oversight of the industry, Bloomberg News reported. Token prices appeared to shrug off the statements from Delio and Haru Invest, underlining the relatively small corner of the crypto lending market affected by the trouble at the two companies.
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Bank of Korea Governor Rhee Chang-yong flagged growing financial sector risks amid a rise in real estate loan delinquencies— even as the broader housing market slowly recovers, Bloomberg News reported. “In the mid- to long-term, it is necessary to find a way to smoothly deleverage household debt in cooperation with relevant institutions so that financial imbalances don’t accumulate again,” Rhee said in the text of a speech he gave Monday to mark the central bank’s 73rd anniversary.
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