South Korea

Bank of Korea Governor Rhee Chang-yong said on Monday recent market concerns over a financially troubled builder are a "warning sign" over the financial risks of prolonged monetary tightening, Reuters reported. While managing inflation remains the top priority, it is important to find the right policy mix as South Korea approaches the end of its long fight to bring consumer prices under control, Rhee said in a New Year message.

After weeks of financial uncertainty and talks of looming liquidation, Farfetch has found its saving grace in South Korean e-commerce company Coupang, Jing Daily reported. Earlier yesterday, Coupang announced its acquisition of the UK-based luxury marketplace, offering $500 million in emergency funding. According to Farfetch, the capital infusion will enable the company to “continue providing exclusive brands and boutiques with bespoke, cutting-edge technology and giving leading designers access to consumers around the globe.” The news arrived at the final hour for Farfetch.

South Korea’s consumer inflation cooled more than expected in November, offering central bank authorities latitude to moderate their hawkish policy tilt going into next year, Bloomberg News reported. Consumer prices rose 3.3% from a year earlier, decelerating from 3.8% growth in October, the statistics office reported Tuesday. Economists surveyed by Bloomberg were expecting inflation to slow to 3.5%. The slowdown comes as oil price gains moderate while demand for agricultural products cools in the wake of the Chuseok holiday period.

China, Japan and South Korea agreed on Sunday to restart cooperation and pave the way for a summit in the latest move to ease tensions between the Asian neighbours, Reuters reported. Even as China and the United States seek to mend frayed ties, including a summit this month between Presidents Xi Jinping and Joe Biden, Beijing is concerned that Washington and its key regional allies are strengthening their three-way partnership.

South Korean banking stocks slumped after President Yoon Suk Yeol expressed sympathy for the country’s mom-and-pop business owners suffering from high interest rates, Bloomberg News reported. During Monday’s cabinet meeting, Yoon introduced comments from small business owners, who likened themselves to “slaves” for banks as they spend most of their earnings in repaying loans. The remarks came at a time when sentiment toward the sector was already weak following a late Sunday report on potential windfall charges on lenders’ excess profit.

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.

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.

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.

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.