Ms Ma noted that semiconductor exports, which make up about 20 per cent of the country's total goods shipped overseas, have already tumbled in the third quarter of this year due to weakening global demand for mobile phones and computers. The Bank of Korea has said that inflation will likely remain high in the 5 per cent to 6 per cent range in the foreseeable future.Įxperts warn that the country's imports and exports could also suffer.ĭr Kang Hyun-ju, research fellow at think-tank Korea Capital Market Institute, said a falling won would typically lead to an increase in exports and gross domestic product, but "the usual formula does not work due to disruption in supply chain and lack of foreign demand amid a looming global recession". But it will come at the expense of weakening the property market and constraining domestic demand," said Ms Ma. "The central bank can raise interest rates to contain inflation/inflation expectations and underpin exchange rate stability. ![]() Ms Ma said the government can also use fiscal measures to ease the burden on the people, such as providing more subsidies on fuel, food and utilities, and offering cash handouts or vouchers to low-income families.īut she added that the Yoon Suk-yeol administration is "currently shifting towards a more prudent fiscal policy", so support measures are not expected to be substantial. ![]() Central bank data showed that South Korea's foreign reserves shrank to US$416.77 billion (S$597.7 billion) as at end-September, down US$19.66 billion from August.
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