Journalist

Kim Yeon-je
  • The murmured question: Will Rhee become third BOK chief in second term?
    The murmured question: Will Rhee become third BOK chief in second term? SEOUL, Feb. 26 (AJP) — That the Bank of Korea will keep the policy rate steady at 2.5 percent on Thursday is hardly in doubt. Whether Governor Rhee Chang-yong will still be holding the gavel beyond the April meeting is. Rhee’s four-year term ends on April 20, shortly after the next rate-setting meeting on April 10. Whether he remains in office will be decided next month. Under the Bank of Korea Act, the governor’s term may be extended once with presidential endorsement. Whether through reappointment or a new nomination, the post must be confirmed at least one month before the term expires to allow for a confirmation hearing. A BOK chief is rarely rejected, given the central bank’s legal independence. Second terms are also uncommon. Only Rhee’s predecessor, Lee Ju-yeol, and Kim Sung-hwan, who served in the 1970s, have been reappointed. Whether Rhee becomes the third remains uncertain. Supporters cite crisis management Those backing Rhee credit his steady navigation through the dramatic monetary tightening and easing cycle in the United States following the post-pandemic inflation surge. Rhee took office in April 2022, at the start of the U.S. Federal Reserve’s withdrawal of excess liquidity injected during the pandemic. Under his watch, the benchmark interest rate rose from 1.5 percent to 3.5 percent by January 2023. As inflation softened and economic growth slowed in the United States, the policy direction shifted in October 2024. Rates came down to 2.5 percent by May 2025. Since then, Rhee’s policy board has opted for caution amid conflicting variables — rising housing prices and household debt at home, shifting rate paths in the U.S. and Japan, and exchange-rate volatility. Inside the central bank, officials largely supported the approach. According to a survey conducted by the BOK labor union in December, more than 61 percent of over 1,100 respondents evaluated Rhee’s monetary policy performance positively. Many economists agreed. “Rhee delivered timely monetary policy and maintained a strong presence during moments of crisis,” said Lee Seung-hoon, an economist at Meritz Securities. Another economist, speaking on condition of anonymity, added, “He managed to keep consumer inflation near the 2 percent target despite a challenging landscape.” Expanding the central bank’s scope Rhee has also been praised for broadening the BOK’s policy outlook beyond monetary frontier. Under his tenure, the bank expanded its “Issue Notes” series, applying statistical methods to challenges ranging from housing to the impact of artificial intelligence on employment. Many of the publications are now released in English, reflecting efforts to deepen international engagement. At a meeting of the Bank for International Settlements in January 2025, Rhee said Korea’s economic challenges “cannot be addressed by monetary policy alone.” Political friction Rhee’s scholarly and outspoken style, however, has unsettled some policymakers. He was appointed in 2022 by outgoing Moon Jae-in, and his term has overlapped with the impeached president Yoon Seok Yeol. Moon and President Lee Jae Myung are of the same progressive Democratic Party. Rhee publicly questioned Lee Jae Myung's campaign proposal to institutionalize universal basic income. Last November, Lee Un-ju, a member of the Democratic Party’s supreme council and a close ally of President Lee, expressed discomfort with the BOK’s focus on social issues such as housing and unemployment. “Why does he keep focusing on irrelevant issues while being so reckless with his own duties?” she wrote on social media. “If that’s the case, he should quit as BOK governor and focus on social policy research.” Such remarks highlighted lingering political unease over Rhee’s broader policy engagement. Successor names surface Given the sensitivity of the matter, officials have remained tight-lipped as differing views emerge. Still, alternative names are being floated. According to a ruling party official who requested anonymity, Shin Hyun-song, head of research at the BIS, is being discussed as a leading candidate. Known for his nonpartisan profile and academic credentials, Shin was also a top contender when Rhee was first nominated. Other names circulating in political circles include Ha Joon-kyung, senior presidential secretary for economic growth, and Lee Seung-heon, a former senior deputy governor of the BOK. “There is a possibility of reappointment, considering that Governor Rhee has recently rolled out measures aligned with the administration’s stance,” the source said. Since last year, Rhee has introduced several initiatives seen as supportive of the government’s broader economic agenda. These include promoting the development of a won-based stablecoin and arranging a foreign exchange swap between the BOK and the National Pension Service. He has championed easing capital-region concentration as a way to address youth unemployment and promote balanced national growth — goals that closely mirror the administration’s policy priorities. 2026-02-25 15:26:08
  • KOSPI lands above 6,000 less than above 5,000
    KOSPI lands above 6,000 less than above 5,000 SEOUL, Feb 25 (AJP) - KOSPI, on a record-setting ride, climbed above the 6,000 mark on Wednesday, less than a month after it tested 5,000, as South Korean retail investors flooded into the red-hot market on bullish forecasts of a further run toward 8,000. As of 9:45 a.m., the KOSPI added 1.07 percent to 6,032.92, with retail buying overwhelming institutional profit-taking. After a stunning 76 percent gain last year, the benchmark has remained unfazed in 2026, soaring 41.66 percent as of Tuesday and extending its rally less than a month after topping the much-touted 5,000 milestone on Jan. 27. The KOSPI’s performance, coupled with the secondary KOSDAQ’s gain of around 26 percent so far this year, is unrivaled globally - the S&P 500 has gained 1.54 percent and the Nasdaq has slipped 0.11 percent, while Japan’s Nikkei 225 up 13.87 percent and Taiwan’s TAIEX rising 19.81 percent. Foreign investment banks have been raising their targets from 7,000 and recently to 8,000 by Nomura Securities, betting on the exceptional artificial intelligence boom driven by Korean chipmakers and component producers. Korean retail investors have shown signs of returning from overseas markets, with customer deposits for local stock investment reaching 108.29 trillion won as of Monday after topping 100 trillion won for the first time late last month. Foreign investors, meanwhile, have been taking profits, selling a net 13.8 trillion won worth of KOSPI shares so far this month, according to the Financial Supervisory Service. 2026-02-25 10:05:15
  • Koreas producer prices on mild increase in Jan on brisk chip demand
    Korea's producer prices on mild increase in Jan on brisk chip demand SEOUL, February 24 (AJP) -South Korea’s producer prices posted mild gains in January despite a softer U.S. dollar against the won and falling fuel prices, supported by brisk chipmaking activity. According to data released by the Bank of Korea on Tuesday, the producer price index (PPI) for January stood at 122.50 (2020=100), up 0.6 percent from the previous month and 1.9 percent from a year earlier. The PPI has recorded monthly increases since September. By category, prices for agricultural, livestock and fishery products rose 0.7 percent, with agricultural products up 1.4 percent and livestock products up 0.9 percent. Manufactured goods increased 0.6 percent, driven by primary metal products, which rose 3.0 percent, and computer, electronic and optical equipment — including semiconductors — up 1.8 percent. Service prices climbed 0.7 percent, led by finance and insurance, up 4.7 percent, and transportation services, up 0.7 percent. Among individual items, prices jumped for DRAM chips (49.5 percent), pumpkins (41.4 percent), silver bullion (43.6 percent), butadiene (26.7 percent), sulfuric acid (15.9 percent), consignment brokerage fees (15.2 percent), primary refined copper products (11.0 percent), beef (6.8 percent) and flash memory (9.9 percent). Prices fell for frozen squid (19.8 percent), mixed sauces (10.4 percent), hotels (7.5 percent), gasoline (6.0 percent) and diesel (5.1 percent). The domestic supply price index, which tracks price changes including imports, rose 0.3 percent from the previous month. Raw material prices fell 0.8 percent, while intermediate goods rose 0.6 percent. The total output price index, which includes export goods along with domestic shipments, rose 1.3 percent, led by manufactured goods, up 1.8 percent, and services, up 0.7 percent. Lee Moon-hee, head of the Bank of Korea’s price statistics team, said key price factors should be closely monitored, noting that Dubai crude prices rose in February from the previous month while the won-dollar exchange rate edged down. Still, Lee said spillover effects were likely to remain limited given the nature of the items driving the increase and a decline in domestic supply prices for consumer goods. He said the rise in producer prices was largely attributable to intermediate goods such as primary metal products and semiconductors, suggesting that any pass-through to consumer prices would likely appear with a time lag. He added that consumer goods prices in the domestic supply index fell for the first time in eight months in January, since May 2025, as the Lunar New Year fell in January last year versus February this year. On U.S. tariffs, Lee said they are not directly reflected in the producer price index, as it measures price changes for goods supplied by domestic producers to the domestic market. 2026-02-24 08:36:31
  • Rate inaction likely in upcoming BOK meeting amid growing uncertainties
    Rate inaction likely in upcoming BOK meeting amid growing uncertainties SEOUL, Feb 23 (AJP) - The Bank of Korea is widely expected to keep its benchmark interest rate unchanged on Thursday, hemmed in by political uncertainty abroad, domestic financial imbalances and a governorship nearing the end of its term. Since cutting rates to 2.5 percent in May last year, the BOK has remained on hold. That pause reflects a series of overlapping constraints: political turbulence triggered by impeachment fallout, renewed U.S. trade pressure, inflation risks from a weak won, and asset inflation driven by overheated housing and equity markets. Each factor alone would complicate policymaking. Together, they have produced near paralysis. The signal was formalized in January. At its Jan. 15 meeting, the BOK removed all references to possible “rate cuts” from its policy statement, shifting to explicitly neutral language. The move effectively closed the door on near-term easing and signaled that the policy cycle had entered a holding phase. Governor Rhee Chang-yong’s four-year term ends on April 20. While an extension is possible, markets remain cautious about any major shift during the transition period. For now, investors are pricing in upside risk rather than easing. The 10-year government bond yield, which peaked at 3.754 percent on Feb. 9, has retreated to around 3.58 percent, but remains nearly 100 basis points above the policy rate — a gap that continues to strain highly leveraged households. External pressures are adding to the bind. South Korea is grappling with persistent capital outflows and a structurally weak currency. As of December 2025, outbound investment by residents reached $14.37 billion, almost triple foreign inflows of $5.68 billion. Although the won briefly strengthened this week on a weaker dollar and renewed uncertainty over U.S. trade policy, it remains anchored near the 1,440-per-dollar level — a reflection of underlying vulnerability. That weakness limits the BOK’s ability to cut rates without risking further capital flight. The appointment of Kevin Warsh as the next Federal Reserve chair has added another layer of complexity. Known for advocating both monetary tightening and selective easing, Warsh embodies a policy mix that could destabilize global rate expectations. For Seoul, this creates an uncomfortable scenario in which both tightening and easing pressures coexist — making abrupt policy moves increasingly risky. Regional dynamics are also shifting. The Bank of Japan has steadily raised rates since exiting its zero-rate era in 2023, lifting its benchmark to 0.75 percent by last December. Although Tokyo paused in January pending wage data, major institutions expect further hikes. “We can expect as many as three rate increases this year,” said Kenya Koshimizu of Mizuho Financial Group, in comments to Reuters. As Japan normalizes policy, Korea’s interest-rate differential is narrowing — reducing Seoul’s flexibility to cut without undermining currency stability. At home, household debt remains the central obstacle. According to BOK data, total household credit reached 1,852.7 trillion won ($1.28 trillion) at the end of 2025, rising 11.1 trillion won from the previous quarter despite tighter lending rules and mortgage caps. More troubling is the shift in borrowing patterns. Lending by non-bank financial institutions jumped to 4.1 trillion won in the fourth quarter, more than double the previous quarter’s level. As borrowers migrate toward higher-cost credit, financial fragility is increasing. In this environment, even a modest rate cut could be interpreted as an invitation to re-leverage — precisely the signal policymakers want to avoid. Analysts view the January statement as decisive. “The BOK effectively signaled the end of the easing cycle,” said Cho Yong-gu of Shinyoung Securities. “With overheated asset markets and rising debt, a rate cut is highly unlikely.” 2026-02-23 17:53:55
  • BOK governor sees economic recovery despite last years stagnation
    BOK governor sees economic recovery despite last year's stagnation SEOUL, Feb 23 (AJP) - South Korea’s central bank expects economic growth in 2026 to rise significantly compared to the previous year, despite last year’s performance falling short of initial market expectations. "Despite uncertainties surrounding US tariff policies, domestic demand is recovering on the back of favorable consumer sentiment, while exports continue their upward trend led by the robust semiconductor sector," BOK Governor Rhee Chang-yong stated during a parliamentary report to the Strategy and Finance Committee on Monday. Regarding inflation, Rhee projected that consumer price growth would maintain a stable trajectory near the 2 percent target. He, however, left the door open for possible fluctuations in international oil prices and exchange rates - which could serve as potential risk factors. The volatility of the won-dollar exchange rate and stock prices was also identified as a significant concern. "While the rise in the exchange rate has been tempered by year-end measures to stabilize foreign exchange supply and demand, the market remains highly volatile, still influenced by external variables such as the movements of the US dollar and the Japanese yen," Rhee noted. On the equity market, he explained that while stock prices rose sharply driven by the boom in key sectors like semiconductors, volatility is now increasing due to concerns over overinvestment in Artificial Intelligence (AI) and the potential displacement of traditional industries. Governor Rhee further emphasized the need for vigilance regarding financial stability. "Credit risks remain prevalent in vulnerable sectors, such as the self-employed, while concerns persist over accumulating financial imbalances caused by rising housing prices in the Seoul metropolitan area," he said. The BOK plans to calibrate its future monetary policy by comprehensively evaluating economic growth, inflation, and financial stability, as global and domestic uncertainties remain elevated. Following Governor Rhee's remarks, yields in the Seoul bond market saw a broad uptick on Monday. The benchmark three-year government bond yield closed at 3.154 percent per annum, rising 1.1 basis points from the previous trading day. The 10-year Treasury yield rose by 3.8 basis points to finish at 3.578 percent. The South Korean economy contracted by 0.3 percent in the fourth quarter of 2025 compared to the previous quarter, according to data released by the BOK on Jan. 22. On an annual basis, the economy recorded a growth of 1.0 percent, significantly missing the central bank's original consensus of 1.8 percent. 2026-02-23 17:40:09
  • Korean sovereign wealth fund reaps 13.91% return in 2025, AUM at record high
    Korean sovereign wealth fund reaps 13.91% return in 2025, AUM at record high SEOUL, February 23 (AJP) -Korea Investment Corporation (KIC) posted a double-digit investment return in 2025 thanks to global equity rally that bolstered its assets under management to a record high. The sovereign wealth fund said Monday that it recorded an annual return of 13.91 percent last year, while its 10-year annualized return from 2016 to 2025 stood at 7.07 percent. Total assets under management (AUM) rose to $232 billion, driven by net investment gains of $28.5 billion. Cumulative net investment gains since inception reached $122.4 billion, exceeding entrusted principal of $118.6 billion for the first time, marking a symbolic milestone for the state-run fund. By asset class, traditional assets — equities and fixed income — accounted for 78.1 percent of total AUM, while alternative assets, including private equity, real estate, infrastructure and hedge funds, made up 21.9 percent. Traditional assets generated a return of 15.1 percent, led by equities at 22.24 percent and fixed income at 7.46 percent. Alternative assets posted a 10-year annualized return of 8.48 percent, reflecting their long-term investment nature. KIC said disciplined portfolio management helped lift returns, with traditional assets outperforming benchmarks by 24 basis points. Fixed income strategies generated 47 basis points of excess return through currency and duration management, while equities delivered 16 basis points of excess performance. “Despite persistent global interest-rate volatility and geopolitical uncertainty, KIC delivered balanced performance through disciplined analysis and rigorous risk management,” said Il Young Park, chief executive officer of KIC. “With market volatility expected to persist, we will focus on enhancing long-term portfolio stability and resilience,” Park said, adding that KIC will implement its Total Portfolio Approach this year to strengthen sustainable returns. Still, the fund, which is restricted to relatively conservative strategies and overseas assets as part of managing the nation’s foreign exchange reserves, performed modestly when compared to the National Pension Service (NPS), which reaped investment return rate of 20 percent last year. 2026-02-23 12:11:29
  • Antitrust watchdog moves to penalize seven flour millers over price-fixing cartel
    Antitrust watchdog moves to penalize seven flour millers over price-fixing cartel SEOUL, Feb 20 (AJP) - South Korea’s competition authority has initiated formal sanctioning procedures against seven major flour producers and distributors, including industry giants CJ CheilJedang and Daehan Flour Mills, for alleged price-fixing. The Korea Fair Trade Commission (KFTC) announced Friday that it has dispatched examination reports—equivalent to a criminal indictment—to seven companies: CJ CheilJedang, Daeseon Flour Mills, Daehan Flour Mills, Sajo Dongawone, Samyang Corp., Samhwa Flour Mills, and Hantop. The move marks the start of a formal deliberation process by the antitrust watchdog to determine the illegality of their actions and subsequent penalties. Under South Korea’s legal framework, the KFTC serves as a quasi-judicial body, with its final decisions functioning as a first-instance court ruling. The latest move is part of a broader government crackdown on cartels that threaten consumer price stability. Since launching its investigation last October, the regulator has concluded that these seven firms, which command an 88 percent share of the domestic business-to-business (B2B) flour market, colluded to fix prices and allocate sales volumes over a period of six years. The commission estimates the relevant revenue affected by the cartel to reach approximately 5.8 trillion won ($4.1 billion). Consequently, the watchdog has proposed corrective orders and significant administrative fines for violating the Fair Trade Act. "Under relevant laws, the commission can impose fines of up to 20 percent of the revenue affected by the collusion," said Yoo Seong-wook, Director General for Investigation Coordination at the KFTC. Yoo stressed that the agency will "strive to substantially block any incentive for cartels through aggressive law enforcement against practices that threaten the people's livelihood." This follows a 2006 case where the authority penalized millers for similar charges. Notably, the current report includes a recommendation for a "price reset order," forcing companies to re-evaluate and lower their prices to competitive levels. "While most cartel cases end with a cease-and-desist order and fines, we determined that an effective restoration of competition is necessary for items so closely tied to daily life," Yoo explained, noting that the price reset order was included as a measure to proactively restore market competition. The KFTC’s decision to publicly announce the dispatch of the report is considered unusual. Historically, the antitrust regulator has maintained a "Neither Confirm Nor Deny" (NCND) stance before final deliberations are concluded. "We considered the need to strengthen the public's right to know and enhance procedural transparency," Yoo said. While the agency plans to disclose information within a scope that does not infringe on the defendants' right to defense, it will follow global trends, such as those in the European Union, where reports are made public before final decisions. The seven firms have eight weeks to submit written opinions or request access to evidence. Given the direct impact on consumer prices, the competition watchdog plans to hold its final plenary session as soon as the defense procedures are completed. The crackdown comes as the government intensifies its focus on essential goods. On Feb. 13, a "Special Task Force for Consumer Price Management" was launched to monitor collusion in markets for flour, sugar, and other necessities. During a meeting on Thursday, President Lee Jae Myung specifically highlighted sugar, flour, meat, and school uniforms as key items requiring scrutiny. 2026-02-20 16:09:37
  • Korean household debt hits new height as hot assets fuel leveraged investment
    Korean household debt hits new height as hot assets fuel leveraged investment SEOUL, Feb 20 (AJP) - Red-hot asset markets in South Korea pushed household debt to a fresh record by the end of 2025, as investors increasingly relied on borrowing for property and stock investment, data showed Friday. According to the Bank of Korea, total household credit outstanding stood at 1,978.8 trillion won ($1.37 trillion) at the end of the fourth quarter of 2025, up 14 trillion won from the previous quarter. It marked the highest level since data collection began in the fourth quarter of 2002. For the full year, household debt expanded by 56.1 trillion won, or 2.9 percent, the largest year-on-year increase since 2021. Loans from commercial banks rose by 6 trillion won in the fourth quarter, sharply easing from a 10.1 trillion won gain in the third quarter, as banks tightened lending to meet year-end regulatory caps. By contrast, lending by non-bank depository institutions increased by 4.1 trillion won, more than double the 2 trillion won rise recorded in the previous quarter. Within this sector, mortgage loans jumped by 6.5 trillion won, reflecting an influx of borrowers turned away by major commercial banks. “Other loans,” including personal credit lines and non-mortgage borrowing, added 3.8 trillion won. These loans, often linked to equity market trading, pushed the balance of credit used for leveraged investment to around 27 trillion won toward the end of the year. Borrowing from “other financial corporations”—including credit card companies, financial holding firms and moneylenders—rose by 1.1 trillion won to 526.1 trillion won. Within this category, non-mortgage loans increased by 5.1 trillion won to 260.4 trillion won, offsetting a decline in housing-related lending. “This appears to be a temporary migration as commercial banks managed loan caps toward the end of the year,” said Lee Hye-young, head of the BOK’s Monetary and Financial Statistics Team. She played down concerns over a long-term deterioration in debt quality, noting that a similar pattern was observed in the fourth quarter of 2024, when non-bank lending surged by 6.6 trillion won after a decline in the previous quarter. In October last year, the government introduced a series of stricter measures, capping mortgage limits from as high as 600 million won to as low as 200 million won depending on property values. Despite the move, critics argue that the impact on overall loan growth was limited, pointing out that the quarterly increase in personal credit loans fell by only 900 billion won from the third quarter. Lee rejected claims that the regulations had failed. “While growth in insurance company loans and card loans partly offset the decline in mortgages, the purposes of these loans vary, including stock investment,” she said. She added that changes in lending patterns should not be interpreted as evidence of regulatory weakness. The central bank projects that South Korea’s household debt-to-GDP ratio will decline slightly from 2024 levels. “We will have a clearer picture after checking nominal GDP statistics in March and flow-of-funds data in April,” Lee said, adding that current indicators suggest the ratio will fall below the 89.6 percent recorded in 2024. However, she cautioned that uncertainty remains high, given fluctuations in mortgage lending and credit-based investment. “It is still too early to draw firm conclusions,” she said, citing volatility in housing finance and leveraged trading demand. 2026-02-20 14:02:37
  • Déjà vu on housing as Seoul launches another real estate war
    Déjà vu on housing as Seoul launches another real estate war SEOUL, Feb 19 (AJP) - Seoul has once again taken a hard-line approach to real estate policy — deploying higher taxes, stricter lending caps and strong-worded warnings from the president. Yet instead of cooling the market, the measures have fueled another surge in housing prices and rents in the capital. Sound familiar? Koreans have witnessed this cycle under almost every progressive government over the past two decades. The pattern is repeated: authorities crack down on multi-home owners to suppress demand, while supply remains constrained and demand stays concentrated in Seoul. The result is the opposite of what policymakers intend. According to the Korea Real Estate Board (REB), the average sale price of apartments in Seoul rose about 9 percent in 2025, the steepest increase since 2006, when prices surged nearly 20 percent. Over the same period, Seoul’s price-to-income ratio (PIR) approached 14 based on median income. In practical terms, this means a household would need to save its entire income for more than 14 years — without spending a single won — to afford a home. Since PIR does not account for living expenses or widening income inequality, the actual burden is even heavier. Regulatory tightening, limited impact To rein in prices, the government has rolled out successive regulations. On June 27 last year, mortgage loans in major regulated areas were capped at 600 million won ($440,000), and buyers were required to move in within six months. On Oct. 15, Seoul and major cities in Gyeonggi Province, including Suwon, Anyang and Gunpo, were designated as land-use permit zones, extending mortgage restrictions even to non-regulated areas. Despite these interventions, prices have continued to climb. Supply shortage meets excessive liquidity Two essential conditions for stabilizing housing prices — expanding supply and absorbing excess liquidity — have remained unmet. According to the Korean Statistical Information Service (KOSIS), nationwide housing supply in 2025 fell to about 380,000 units, down 14.5 percent from the previous year. In Seoul, supply dropped nearly 20 percent to 41,566 units from 51,452 in 2024. While supply in 2025 was slightly higher than in 2023, the key difference was liquidity. In 2023, M2 money supply growth stood at just 3.89 percent. By 2025, it had surged to 8.5 percent, more than doubling in two years. Liquidity was being injected into the market at a much faster pace. History shows that housing booms have consistently coincided with rising M2 growth. In 2006, when prices jumped about 24 percent, M2 growth reached 8.3 percent. In 2021, when prices rose nearly 20 percent, it climbed to 11.7 percent. Similar regulatory regimes were in place at the time. Under former President Roh Moo-hyun, the government strengthened comprehensive real estate taxes and introduced the reconstruction excess profit restitution system. During the Moon Jae-in administration, speculative zones and tighter mortgage limits became the policy centerpiece. Abundant liquidity tends to push down interest rates and inflate asset prices. When strict regulations collide with shrinking supply, competition for remaining inventory intensifies, driving prices even higher. Liquidity debate After the Jan. 15 Monetary Policy Committee meeting, Bank of Korea Governor Rhee Chang-yong argued that M2 growth excluding securities was only 4.74 percent in 2025, saying the money supply had not increased significantly. However, data suggests that a large portion of liquidity entered the housing market through stock gains. According to documents submitted to Rep. Kim Jong-yang’s office on Feb. 10, more than 2 trillion won in stock profits was used for home purchases in the second half of last year alone. This weakens the rationale for excluding securities from liquidity assessments. Need for liquidity management and tax reform Financial authorities acknowledge the importance of liquidity control. Explaining the rate freeze on Jan. 15, Rhee noted that “abundant liquidity acts as a driver for rising asset prices,” implicitly recognizing its role in real estate inflation. Experts also warn that tax policies can backfire. “Holding taxes can reinforce the perception of property as a premium asset, while high transaction taxes discourage selling,” said a real estate research institute official, adding that taxes ultimately become part of a home’s price tag. Supply is key — but no quick fix The most effective long-term solution remains boosting supply. On Jan. 29, the government announced plans to prioritize 60,000 units in Seoul and surrounding areas. Yet few expect immediate relief. “Construction will not begin until 2027 or 2028 at the earliest, so it will take time for supply to reach the market,” said Lee Chang-moo, a professor at Hanyang University. “These measures should be viewed from a mid- to long-term perspective.” A similar lag occurred under the Roh administration, when new towns such as Pangyo, Dongtan and Gwanggyo were planned. Although roughly 300,000 units were announced, large-scale move-ins did not begin until 2009, after Roh left office. Experts say today’s policies should be judged in the same way — not by short-term price movements, but by whether they ultimately correct the structural imbalance between supply, liquidity and demand. 2026-02-19 17:49:09
  • Chip-led export price gains more than offset Koreas import inflation in Jan
    Chip-led export price gains more than offset Korea's import inflation in Jan SEOUL, February 13 (AJP) - South Korea's export prices picked up far faster than import prices in January on the back of strong semiconductor demand, more than offsetting import inflation caused by a weak currency, data showed Friday. According to the Bank of Korea, January export prices climbed 4.0 percent from December and 7.8 percent from a year earlier, accelerated from a 0.6 percent monthly gain and a 0.1 percent annual decline in December. Strong demand for chips and IT products more than offset the slight softening of the dollar. The won averaged 1,456.51 per dollar in January, compared with 1,467.4 in December. The export volume index jumped 28.3 percent from a year earlier, while the export value index surged 37.3 percent, more than tripling December’s growth pace and overwhelming gains in imports. Import volume and value indices increased 14.5 percent and 12.5 percent, respectively, from a year earlier. The electronics segment, including semiconductors, bolstered export prices, rising 12.4 percent from December and 34.2 percent from a year earlier. DRAM prices surged 31.6 percent from the previous month, while flash memory rose 9.9 percent. Compared with a year earlier, prices for both items more than doubled — up 102.7 percent for DRAM and 115.1 percent for NAND. Primary metal products, including copper, also supported the upward trend, rising 7.1 percent from December and 22.0 percent from a year earlier. Strong copper demand from semiconductor and power-grid sectors, combined with rallies in precious metals such as gold and silver, lifted prices. Silver ingots jumped 42.1 percent from December, while refined copper products rose 10.4 percent. Gold prices surged more than 80 percent between December and January to reach $5,000 per troy ounce, while silver climbed to a record above $120. Copper also gained about 5 percent to around $8,800 per ton. Import Prices Rise Moderately Import price gains remained relatively mild despite prolonged weakness in the won, reflecting softer international fuel prices and subdued domestic demand. Import prices edged up 0.4 percent from December and fell 1.2 percent from a year earlier. Copper ore recorded the sharpest increase, jumping 10.1 percent from the previous month, as demand expanded across AI-related industries, from semiconductors to power grids. Primary metal products led import price increases, posting a 6.3 percent monthly gain and an 18.5 percent annual rise. Refined precious metals rose 24.6 percent from December and surged 129.5 percent from a year earlier, driven by price spikes in non-ferrous metals used in semiconductors, including platinum and palladium. Trade Conditions Improve The net terms-of-trade index rose 8.9 percent from a year earlier, up from around 5 percent in December, and climbed 4.4 percent from the previous month. The income terms-of-trade index jumped 39.7 percent from a year earlier, reflecting sharply improved export earnings. Fuel Prices Decline, With Exceptions Export prices for coal and petroleum products fell 0.4 percent from December and dropped 13.1 percent from a year earlier, reflecting lower crude oil prices. Dubai crude fell to around $61 per barrel in December, and those cheaper imports were processed and exported in January. Gasoline export prices declined 3.7 percent from December. Retail gasoline prices in Seoul fell from 1,802 won per liter in December to 1,763 won in January. Diesel prices dropped 13.1 percent from a year earlier amid slowing demand for diesel vehicles and rising inventories. Bunker C oil prices slid 25.1 percent as global cargo volumes softened. Jet fuel prices rose 0.4 percent from December, supported by strong year-end travel demand and increased air cargo linked to tensions around the Strait of Hormuz. On the import side, crude oil and bunker fuel prices fell 22.9 percent and 20.5 percent, respectively, from a year earlier. By contrast, liquefied petroleum gas prices rose 5.3 percent from December, as winter heating demand remained strong and Saudi Aramco raised its January contract prices by more than 6 percent per ton. 2026-02-13 14:53:08