South Korea

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.

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.

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.

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.

Fallen crypto impresario Do Kwon has funneled tens of millions of dollars out of an entity linked to his failed blockchain project since he was arrested in late March, South Korean prosecutors alleged, Bloomberg News reported. The $29 million worth of digital tokens were likely moved by Kwon personally or at his direction, Dan Sunghan, director of the financial crime investigation bureau at the Seoul Southern District Prosecution Service, said in an interview with Bloomberg News.

South Korea's exports fell for a seventh straight month in April for their longest losing streak in three years, driven by an extended slump in sales to China and suggesting persistent pressure on the economy from frail global demand, Reuters reported. The downturn comes despite the reopening of the Chinese economy - a major market for South Korean goods and especially for chips - in December, and raises the challenge for policymakers as they push for a robust post-COVID revival.

Should a slowing economy lead to a weak stock market? Not judging by the performance of South Korea’s benchmark index this year, the Wall Street Journal reported. The country’s stock market is the best performer in Asia and one of the top indexes in the world so far this year. The Kospi Composite Index has risen more than 11% since Jan. 1, fueled by a rally in the shares of big technology companies such as Samsung Electronics Co. and SK Hynix Inc., which together account for a fifth of the index.

South Korea’s financial authorities will drastically reform the country’s 10-year-old system to better manage and supervise savings banks as the failures of U.S. Silicon Valley Bank and Credit Suisse Group AG have heightened uncertainties in the global financial market and concerns over non-performing real estate project financing loans in the country, according to sources from the financial circle on Sunday, Pulse reported.

South Korea's central bank on Tuesday held interest rates steady and warned against expectations for a rate cut within this year, saying cooling but still high inflation posed a bigger risk than an economic slump. Remarks by the bank's governor at a news conference were largely neutral, but economists said the unanimous rate decision indicated the board has turned more dovish than at the previous meeting, when there was one member voting for a hike. The Bank of Korea's board kept the base rate unchanged at 3.50%, as it did on Feb. 23 and as expected.