This year, under the influence of the "big deal" of the Federal Reserve hike rate , South Korea has become one of the "sciences under the knife".
USD strengthened, further causing the Korean won to plummet. From the beginning of the year to the present, the depreciation of the Korean won has exceeded 20% . As of 10 May 14 14 on May 5, the exchange rate of the Korean won against the US dollar fell again 0.23% to 1.427 . Since the third quarter, the Korean won has become one of the worst-performing currencies in Asia.
(Source: Zitu.com)
However, while the Korean won depreciates significantly, it will have a series of negative impacts. Relevant economic sources said that the depreciation of the South Korean won will further push up South Korea's already high inflation rate. In this case, the Bank of Korea will choose to use foreign exchange reserves to support its own currency, but other problems will arise at this time.
It is understood that South Korea's foreign exchange reserves currently saw the largest decline in nearly 14 years in September, down $19.7 billion to $416.8 billion.
(Source: Zitu.com)
However, it is still difficult for the Bank of South Korea to keep up with the Fed's interest rate hike rate, which shows that the pressure on the depreciation of the Korean won is still there. In addition, industry insiders expressed their opinions on the Bank of Korea's move to follow the Federal Reserve's Fed's interest rate hike: If a significant rate hike continues to be significantly increased, it may put South Korea in debt risks.
10 May 23 Media reported that South Korea's government debt accounts for its domestic 3GDP is growing rapidly. In the past 5 years, the growth rate of 5 may reach 5 times that of the major developed economies .
(Source: Zitu.com)
Media said that the South Korean government's debt accounted for 40.1% of its total GDP in 2017, but with the support of currency depreciation and following the U.S. interest rate hike, International Monetary Fund predicts that South Korea's debt proportion may rise to 54.1% by the end of this year, an increase of about 14% in five years, and will continue to climb to 57.7% by 2027.
, compared with , the International Monetary Fund expects that the average debt ratio of other developed economies will rise from 71.6% to 77.1% , an increase of approximately 5.5% .
text | Wei Yansong Title | Huang Zixin Review | Zeng Yi
