Journalist

Jang Sun-a
  • South Korea presses for currency swap with US as $350 billion deal hangs in balance
    South Korea presses for currency swap with US as $350 billion deal hangs in balance SEOUL, September 24 (AJP) - South Korea’s negotiations with the Trump administration over a $350 billion investment package remain unresolved, casting uncertainty over the country’s trade relationship with Washington and fueling worries about foreign exchange stability. The deal, first outlined in July, envisioned lowering mutual tariffs from 25 percent to 15 percent, with Seoul channeling $350 billion into U.S. projects — including $150 billion for a shipbuilding fund. But talks have stalled over investment terms, leaving South Korea facing the possibility of high tariffs on its exports if no agreement is reached. President Lee Jae Myung, who met with American lawmakers on Sept. 22, acknowledged the fragility of South Korea’s financial markets in the absence of a deal. He warned that committing such an enormous sum without a currency swap arrangement with the United States could trigger turmoil comparable to the 1997 Asian financial crisis. “The outflow of $350 billion would severely impact South Korea’s economy,” Lee said, adding that a currency swap was essential to guard against shocks. The pledge, still under negotiation, would surpass the total annual foreign direct investment the United States received in both 2023 and 2024, according to the Commerce Department. Funding it poses steep challenges for Seoul. For now, President Lee has called for “commercial rationality” in any final arrangement. But with negotiations dragging on, Seoul must weigh the costs of protecting its export industries against the potential financial strain of an unprecedented investment abroad. Drawing on foreign reserves could weaken the Korean currency and erode investor confidence, while issuing large volumes of bonds risks higher interest rates and slower growth. Economists have sounded alarms. Professor Kim Sang-bong of Hansung University said tapping reserves could push the exchange rate to 2,000 won per dollar from the current 1,350 won range, while extensive bond issuance could drive up borrowing costs across the economy. By contrast, Japan recently committed $550 billion in cash to the United States over three years, a move cushioned by Tokyo’s unlimited currency swap line with the Federal Reserve. Seoul, lacking such a safeguard, faces more acute risks. Some South Korean experts suggest accepting the higher tariff burden might be more manageable than financing the vast outflow. Others propose building stabilization funds or expanding swap networks to protect against capital flight. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-09-24 10:07:03
  • Lee Chang-yong to become Koreas first central bank governor to deliver lecture at IMF
    Lee Chang-yong to become Korea's first central bank governor to deliver lecture at IMF Bank of Korea Governor Lee Chang-yong is set to become the first South Korean central bank governor to deliver the prestigious Michel Camdessus Central Banking Lecture at the International Monetary Fund (IMF) in Washington, D.C. The lecture series, named after the IMF's longest-serving managing director, is a high-profile forum designed to foster collaboration with central banks and address key issues in monetary policy and the global economy. Past speakers have included prominent figures like European Central Bank President Christine Lagarde, former Federal Reserve Chair Janet Yellen, and former Bank of England Governor Mark Carney, underscoring the event's significance. Lee's speech will be followed by a dialogue with IMF Managing Director Kristalina Georgieva. The event will be live-streamed on the IMF's official YouTube channel on Sept. 18 at 11:50 p.m, (KST). This marks another notable international appearance for Lee, who previously spoke at the U.S. Federal Reserve's Jackson Hole Economic Policy Symposium in 2022 and the European Central Bank's annual forum in Sintra this past June. His participation highlights South Korea's growing influence in international economic and monetary discussions, the BOK said. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-09-16 13:46:16
  • Dollars dominance amplifies US financial shocks in South Korea: BOK
    Dollar's dominance amplifies US financial shocks in South Korea: BOK The Bank of Korea has warned that South Korea’s economy remains acutely vulnerable to financial turbulence in the United States, a consequence of the dollar’s unrivaled role in global finance and trade. In a report released on Monday, the central bank argued that the international status of the dollar magnifies the effect of American financial shocks, rippling through South Korea’s markets, exports and investment. The analysis also urged policymakers to prepare for shifts in the global currency order, including the rise of dollar-based stablecoins and efforts to expand the use of the Korean won in cross-border settlements. The dollar’s standing as the world’s primary safe asset, the report noted, means that U.S. interest rate hikes or episodes of market instability can quickly strengthen the greenback, depress consumption and investment at home, and raise the cost of South Korean exports abroad. Without the dollar’s dominance in trade and finance, the report estimated, the decline in South Korean production during such shocks could be cut by as much as one-third. A strong dollar also weighs heavily on exporters by pushing up the relative price of South Korean goods. If trade settlements were conducted in won instead of dollars, the bank found, the resulting decline in production could be reduced by a quarter. “The global role of the dollar creates an additional transmission channel that amplifies financial shocks from the United States,” the bank wrote. The study also examined the potential long-term effects of digital innovation in finance. Son Min-kyu, head of the bank’s financial modeling team, said that greater use of dollar-based stablecoins in trade settlements could intensify the impact of dollar fluctuations worldwide, while potentially increasing demand for U.S. Treasuries used as collateral. But the implications for the dollar’s status as the world’s dominant safe asset, Son added, remain uncertain. He noted that South Korea could cushion itself from some of these shocks if its government bonds gain inclusion in the World Government Bond Index, a move that could attract more global investors. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-09-15 14:43:55