South Korea’s central bank, Bank of Korea, has decided to leave its benchmark interest rate unchanged at 2.5 per cent, as it continues to navigate a delicate economic landscape marked by rising household debt and uncertainties surrounding US tariffs. The Bank of Korea (BOK) announced its decision on July 10, prioritising financial stability over immediate growth concerns.<h2>Caution over household debt and housing market</h2>The Bank of Korea’s decision comes at a time of heightened concern about the country’s housing market, particularly in Seoul and its surrounding areas, where housing prices have seen significant acceleration. In June, annualised housing prices surged by over 19 per cent, according to Goldman Sachs, prompting authorities to implement measures aimed at cooling the market. Household debt, which has risen dramatically, has also become a central issue for the central bank.Despite this, the bank noted that its recent measures to address household debt seem to have had a stabilising effect on the housing market. However, the BOK acknowledged that risks remain, particularly with ongoing concerns about the foreign exchange market’s volatility and potential impacts from global trade dynamics.<h2>Economic slowdown and US tariffs</h2>The South Korean economy has faced headwinds in recent months, with export growth slowing and construction activity weakening. Moreover, uncertainty surrounding trade negotiations, particularly with the US, has added further strain. President Donald Trump has threatened to impose 25 per cent tariffs on all South Korean imports starting August 1 if trade talks do not progress. These tariff threats have added complexity to an already challenging economic environment.Looking ahead, economists expect the Bank of Korea may be inclined to cut rates later this year, potentially in August and November, once the effects of housing market cooling measures become clearer. However, concerns over high household debt are expected to temper any aggressive policy moves. As the Bank of Korea remains vigilant in balancing growth and financial stability, it will continue to monitor both domestic and global developments closely, with an eye on how these factors impact inflation and economic sentiment.

The Bank of Korea’s decision comes at a time of heightened concern about the country’s housing market, particularly in Seoul and its surrounding areas, where housing prices have seen significant acceleration. 

South Korea’s central bank, Bank of Korea, has decided to leave its benchmark interest rate unchanged at 2.5 per cent, as it continues to navigate a delicate economic landscape marked by rising household debt and uncertainties surrounding US tariffs. The Bank of Korea (BOK) announced its decision on July 10, prioritising financial stability over immediate growth concerns. Caution over household debt and housing market The Bank of Korea’s decision comes at a time of heightened concern about the country’s housing market, particularly in Seoul and its surrounding areas, where housing prices have seen significant acceleration. In June, annualised housing prices surged by over 19 per cent, according to Goldman Sachs, prompting authorities to implement measures aimed at cooling the market. Household debt, which has risen dramatically, has also become a central issue for the central bank. Despite this, the bank noted that its recent measures to address household debt seem to have had a stabilising effect on the housing market. However, the BOK acknowledged that risks remain, particularly with ongoing concerns about the foreign exchange market’s volatility and potential impacts from global trade dynamics. Economic slowdown and US tariffs The South Korean economy has faced headwinds in recent months, with export growth slowing and construction activity weakening. Moreover, uncertainty surrounding trade negotiations, particularly with the US, has added further strain. President Donald Trump has threatened to impose 25 per cent tariffs on all South Korean imports starting August 1 if trade talks do not progress. These tariff threats have added complexity to an already challenging economic environment. Looking ahead, economists expect the Bank of Korea may be inclined to cut rates later this year, potentially in August and November, once the effects of housing market cooling measures become clearer. However, concerns over high household debt are expected to temper any aggressive policy moves. As the Bank of Korea remains vigilant in balancing growth and financial stability, it will continue to monitor both domestic and global developments closely, with an eye on how these factors impact inflation and economic sentiment.

The Bank of Korea’s decision comes at a time of heightened concern about the country’s housing market, particularly in Seoul and its surrounding areas, where housing prices have seen significant acceleration.&nbsp;

Bank of Korea holds rate steady amid housing market concerns

In a move aimed at shielding South Korea’s faltering economy from global trade shocks and domestic instability, the Bank of Korea (BOK) on Thursday cut its key interest rate for the fourth time since October. The central bank lowered its seven-day repurchase rate by 25 basis points to 2.5 per cent, a decision that was widely anticipated by markets and economists alike.&nbsp;According to Bloomberg, all 21 economists surveyed had predicted the cut, as pressure mounted on the BOK to act amid a worsening external environment and weak domestic indicators.<h2>Economy in reverse as political crisis deepens</h2>South Korea’s economy slipped into contraction in the first quarter of 2025, and recent indicators show little momentum for recovery. A combination of sluggish exports, faltering domestic consumption, and subdued business investment has led policymakers to acknowledge the need for further stimulus.&nbsp;The BOK also revised its annual growth forecast down sharply to 0.8 per cent, from an earlier estimate of 1.5 per cent made in February. This move reflects the twin headwinds facing Asia’s fourth-largest economy: the global trade upheaval triggered by US tariffs and the uncertainty following the ousting of former President Yoon Suk Yeol.&nbsp;Yoon, removed from office in April after a failed martial law attempt led to a constitutional crisis, left behind a political vacuum just as Donald Trump’s sweeping import tariffs rattled global markets.&nbsp;Trump’s April announcement of 10 per cent tariffs on all US imports—and a 60 per cent duty on Chinese goods has hit export-heavy economies like South Korea especially hard.&nbsp;According to Bloomberg, the South Korean won initially held steady but later fell by 0.4 per cent against the US dollar following the rate cut announcement.<h2>Monetary easing despite election sensitivities</h2>The rate cut comes just five days before South Korea’s presidential election on June 3, a timing that has raised eyebrows in some quarters. However, BOK Governor Rhee Chang-yong had already signalled in April that the decision would remain focused solely on the economy, not politics.&nbsp;“At that time, all six board members were open to a rate cut within three months,” Bloomberg reported, “in what appeared to be a clear signal that action was coming this month.”&nbsp;The recent appreciation of the Korean won, which had climbed to a seven-month high, also provided more room for the BOK to resume easing without immediately stoking inflation, a concern that had restrained its previous moves.<h2>Fiscal stimulus on the horizon</h2>The election result is expected to shape the broader fiscal landscape in the months ahead. The frontrunner, Lee Jae-myung of the Democratic Party, has pledged at least 30 trillion won ($21.8 billion) in stimulus focused on households and small businesses. His conservative challenger, Kim Moon-soo, has proposed a similar-sized supplementary budget aimed at boosting public welfare.&nbsp;As Bloomberg notes, “The BOK and broader markets are closely watching which candidate takes office, as their fiscal strategies will shape the central bank’s room to manoeuvre.”&nbsp;The South Korean parliament has already passed a 13.8 trillion won supplementary budget, targeted at buffering vulnerable sectors and mitigating tariff-induced trade risks. However, implementation of any further measures is likely to hinge on the incoming president’s priorities.

Business & Economy: The rate cut comes just five days before South Korea’s presidential election on June 3, a timing that has raised eyebrows in some quarters.

In a move aimed at shielding South Korea’s faltering economy from global trade shocks and domestic instability, the Bank of Korea (BOK) on Thursday cut its key interest rate for the fourth time since October. The central bank lowered its seven-day repurchase rate by 25 basis points to 2.5 per cent, a decision that was widely anticipated by markets and economists alike. According to Bloomberg, all 21 economists surveyed had predicted the cut, as pressure mounted on the BOK to act amid a worsening external environment and weak domestic indicators. Economy in reverse as political crisis deepens South Korea’s economy slipped into contraction in the first quarter of 2025, and recent indicators show little momentum for recovery. A combination of sluggish exports, faltering domestic consumption, and subdued business investment has led policymakers to acknowledge the need for further stimulus. The BOK also revised its annual growth forecast down sharply to 0.8 per cent, from an earlier estimate of 1.5 per cent made in February. This move reflects the twin headwinds facing Asia’s fourth-largest economy: the global trade upheaval triggered by US tariffs and the uncertainty following the ousting of former President Yoon Suk Yeol. Yoon, removed from office in April after a failed martial law attempt led to a constitutional crisis, left behind a political vacuum just as Donald Trump’s sweeping import tariffs rattled global markets. Trump’s April announcement of 10 per cent tariffs on all US imports—and a 60 per cent duty on Chinese goods has hit export-heavy economies like South Korea especially hard. According to Bloomberg, the South Korean won initially held steady but later fell by 0.4 per cent against the US dollar following the rate cut announcement. Monetary easing despite election sensitivities The rate cut comes just five days before South Korea’s presidential election on June 3, a timing that has raised eyebrows in some quarters. However, BOK Governor Rhee Chang-yong had already signalled in April that the decision would remain focused solely on the economy, not politics. “At that time, all six board members were open to a rate cut within three months,” Bloomberg reported, “in what appeared to be a clear signal that action was coming this month.” The recent appreciation of the Korean won, which had climbed to a seven-month high, also provided more room for the BOK to resume easing without immediately stoking inflation, a concern that had restrained its previous moves. Fiscal stimulus on the horizon The election result is expected to shape the broader fiscal landscape in the months ahead. The frontrunner, Lee Jae-myung of the Democratic Party, has pledged at least 30 trillion won ($21.8 billion) in stimulus focused on households and small businesses. His conservative challenger, Kim Moon-soo, has proposed a similar-sized supplementary budget aimed at boosting public welfare. As Bloomberg notes, “The BOK and broader markets are closely watching which candidate takes office, as their fiscal strategies will shape the central bank’s room to manoeuvre.” The South Korean parliament has already passed a 13.8 trillion won supplementary budget, targeted at buffering vulnerable sectors and mitigating tariff-induced trade risks. However, implementation of any further measures is likely to hinge on the incoming president’s priorities.

The Bank of Korea (BOK) has cut its key interest rate for the fourth time since October to protect South Korea's economy from global trade shocks and domestic instability.&nbsp;

Bank of Korea cuts rates to shield economy from Trump tariffs and political turmoil

The Bank of Korea (BOK) is anticipated to maintain its policy rate at 3.5 per cent in its forthcoming meeting on Friday. <o:p></o:p>

According to Bloomberg, this decision comes as South Korea experiences a political shift and as two of the bank's board members prepare to step down. <o:p></o:p>

All 23 economists surveyed by Bloomberg are in consensus that the central bank will keep its benchmark rate unchanged, indicating a cautious approach towards policy adjustments. <o:p></o:p>

The BOK last raised its rates in January 2023 and has since maintained a "restrictive" rate level to combat inflation.<o:p></o:p>

Inflation emerged as a major issue during Wednesday's parliamentary election. <o:p></o:p>

Despite the government's efforts to mitigate inflation through various initiatives, including encouraging retailers to reduce grocery prices and temporarily freezing public utility charges, President Yoon Suk Yeol's party suffered a major defeat. <o:p></o:p>

Last month, consumer prices surged by 3.1 per cent, surpassing expectations and remaining above the BOK's target of 2 per cent. <o:p></o:p>

Additionally, the looming concern of escalating household debt adds to the BOK's hesitancy in announcing an early policy shift.<o:p></o:p>

Bloomberg cited Kim Sung-soo, an analyst at Investment &amp; Securities, who advised caution, saying, “Inflation is showing the last mile is not easy.” <o:p></o:p>

This sentiment is reverberated by the rise in South Korea’s three-year bond yield, which has increased by approximately 24 basis points this year to 3.39 per cent, nearing the BOK's current rate. <o:p></o:p>

Market indicators, such as the swaps market, currently project zero rate cuts over the next six months.<o:p></o:p>

A strong rebound in exports and industrial production supports the case for the BOK to retain its high-interest rates. <o:p></o:p>

South Korea's semiconductor output, a crucial component of its industrial strength, witnessed its most significant surge in 14 years in February. <o:p></o:p>

Moreover, semiconductor exports reached their highest monthly total since 2022 last month. <o:p></o:p>

Meanwhile, the South Korean won has depreciated by around 5.6 per cent this year against the dollar, aligning with global trends as the Federal Reserve's data has diminished expectations for imminent rate cuts.<o:p></o:p>

Stable exchange rates are important for South Korea, given its heavy reliance on imports for food and energy. <o:p></o:p>

The BOK is trying to prevent a rapid currency devaluation, which could trigger capital outflows and unsettle financial markets. <o:p></o:p>

Following Friday's decision, the BOK will bid farewell to two early advocates for higher rates, Cho Yoon-Je and Suh Young Kyung, who were involved in the decision to raise rates from a record low of 0.5 per cent in 2021.<o:p></o:p>

Despite the impending departure of these board members, the BOK's stance is unlikely to shift towards a more dovish approach immediately. <o:p></o:p>

Governor Rhee Chang-yong previously indicated no expectations for a rate cut in the first half of the year. <o:p></o:p>

With five more decisions to make in 2024 following the April meeting, the central bank's approach remains cautious but has shown signs of moderation. <o:p></o:p>

Recent discussions within the board have hinted at rate cuts in the short term if necessary, suggesting a slightly softer stance compared to previous months.<o:p></o:p>

Looking ahead, analysts from Citi Research anticipate the BOK may adjust its policy statement to signal a more flexible approach to monetary policy later this year. <o:p></o:p>

They suggest that the BOK "may open the scope for a gradual normalization of monetary policy in the rest of this year due to dovish risk factors." <o:p></o:p>

These potential risks include deteriorating credit conditions for construction firms, a deceleration in private spending, and escalating geopolitical tensions impacting global trade. <o:p></o:p>

Goldman Sachs economists anticipate a shift towards a more accommodative policy in the coming months, forecasting an easing cycle starting in July and a subsequent rate cut in the last quarter of 2024.<o:p></o:p>

(With inputs from Bloomberg)<o:p></o:p>

The Bank of Korea (BOK) is anticipated to maintain its policy rate at 3.5 per cent in its forthcoming meeting on Friday. According to Bloomberg, this decision comes as South Korea experiences a political shift and as two of the bank's board members prepare to step down.

The Bank of Korea (BOK) is anticipated to maintain its policy rate at 3.5 per cent in its forthcoming meeting on Friday. According to Bloomberg, this decision comes as South Korea experiences a political shift and as two of the bank's board members prepare to step down. All 23 economists surveyed by Bloomberg are in consensus that the central bank will keep its benchmark rate unchanged, indicating a cautious approach towards policy adjustments. The BOK last raised its rates in January 2023 and has since maintained a "restrictive" rate level to combat inflation. Inflation emerged as a major issue during Wednesday's parliamentary election. Despite the government's efforts to mitigate inflation through various initiatives, including encouraging retailers to reduce grocery prices and temporarily freezing public utility charges, President Yoon Suk Yeol's party suffered a major defeat. Last month, consumer prices surged by 3.1 per cent, surpassing expectations and remaining above the BOK's target of 2 per cent. Additionally, the looming concern of escalating household debt adds to the BOK's hesitancy in announcing an early policy shift. Bloomberg cited Kim Sung-soo, an analyst at Investment & Securities, who advised caution, saying, “Inflation is showing the last mile is not easy.” This sentiment is reverberated by the rise in South Korea’s three-year bond yield, which has increased by approximately 24 basis points this year to 3.39 per cent, nearing the BOK's current rate. Market indicators, such as the swaps market, currently project zero rate cuts over the next six months. A strong rebound in exports and industrial production supports the case for the BOK to retain its high-interest rates. South Korea's semiconductor output, a crucial component of its industrial strength, witnessed its most significant surge in 14 years in February. Moreover, semiconductor exports reached their highest monthly total since 2022 last month. Meanwhile, the South Korean won has depreciated by around 5.6 per cent this year against the dollar, aligning with global trends as the Federal Reserve's data has diminished expectations for imminent rate cuts. Stable exchange rates are important for South Korea, given its heavy reliance on imports for food and energy. The BOK is trying to prevent a rapid currency devaluation, which could trigger capital outflows and unsettle financial markets. Following Friday's decision, the BOK will bid farewell to two early advocates for higher rates, Cho Yoon-Je and Suh Young Kyung, who were involved in the decision to raise rates from a record low of 0.5 per cent in 2021. Despite the impending departure of these board members, the BOK's stance is unlikely to shift towards a more dovish approach immediately. Governor Rhee Chang-yong previously indicated no expectations for a rate cut in the first half of the year. With five more decisions to make in 2024 following the April meeting, the central bank's approach remains cautious but has shown signs of moderation. Recent discussions within the board have hinted at rate cuts in the short term if necessary, suggesting a slightly softer stance compared to previous months. Looking ahead, analysts from Citi Research anticipate the BOK may adjust its policy statement to signal a more flexible approach to monetary policy later this year. They suggest that the BOK "may open the scope for a gradual normalization of monetary policy in the rest of this year due to dovish risk factors." These potential risks include deteriorating credit conditions for construction firms, a deceleration in private spending, and escalating geopolitical tensions impacting global trade. Goldman Sachs economists anticipate a shift towards a more accommodative policy in the coming months, forecasting an easing cycle starting in July and a subsequent rate cut in the last quarter of 2024. (With inputs from Bloomberg)

Bank of Korea expected to maintain interest rates amid political shifts, inflation concerns

South Korea's Central Bank, the Bank of Korea (BOK), is undergoing a shakeup in its policy board, raising concerns about future efforts to control inflation, warns a former policy director.<o:p></o:p>

According to Bloomberg News, the impending departure of key members, Cho Yun-je and Suh Young Kyung, who played pivotal roles in the decision to raise interest rates in August 2021, is leaving the BOK with a leadership vacuum in the face of potential economic challenges. <o:p></o:p>

This development adds an element of unpredictability to the BOK's strategy in tamping down price pressure in case it resurfaces, given the departure of experienced figures who witnessed the adverse effects of aggressively eased policies.<o:p></o:p>

Early inflation fighters bid farewell<o:p></o:p>

The BOK's board reorganisation is part of one of the most substantial overhauls in years. <o:p></o:p>

Cho Yun-je and Suh Young Kyung, the only remaining members from the board that initiated the key interest rate hike in August 2021, are set to complete their four-year terms in April. <o:p></o:p>

Hong Kyungsik, the recently retired director general of the monetary policy department, emphasises their crucial role, stating, "They were there to witness the adverse effects of aggressively eased policy." <o:p></o:p>

Leadership vacuum raises concerns<o:p></o:p>

The departure of key figures from the BOK's board raises concerns about the institution's ability to navigate future challenges. <o:p></o:p>

Hong Kyungsik, who observed the decision-making process leading to the exit from the record-low rate of 0.5 per cent, notes the value of the experience in addressing financial imbalances in an ultra-low-rate environment. <o:p></o:p>

With Cho and Suh leaving, Governor Rhee Chang-yong and board member Shin Sung Hwan will be the sole members with pre-2023 experience, potentially heightening uncertainties in the board's decision-making process.<o:p></o:p>

Economic challenges and political landscape<o:p></o:p>

As South Korea gears up for parliamentary elections in April, the BOK faces challenges not only internally but also externally. <o:p></o:p>

The nominations for new board members typically involve consultation with the president's office, adding a political dimension to the central bank's restructuring. <o:p></o:p>

The elections are crucial to President Yoon Suk Yeol's policy agenda, shaping the economic landscape for the remainder of his term until 2027.<o:p></o:p>

Real estate concerns prompt caution<o:p></o:p>

The BOK, amidst the board reshuffle, is likely to grapple with credit risks associated with the real estate market. <o:p></o:p>

Hong points out that concerns related to the real estate sector influenced the bank's decision to slow the pace of tightening and maintain the interest rate at 3.5 per cent for most of 2023. <o:p></o:p>

Challenges in the construction industry, exemplified by the financial troubles of companies like Taeyoung Engineering &amp; Construction Co., continue to test the board's direction in policymaking.<o:p></o:p>

Divergent views on interest rates<o:p></o:p>

Divergent views on interest rates within the BOK are evident, with an unidentified board member suggesting a possible rate cut in the next three months, a proposition Governor Rhee pushed back against, stating it would be challenging in the first half of 2024. <o:p></o:p>

Hong Kyungsik aligns with Rhee's perspective, emphasising that it is too early for the BOK to pivot, considering the ongoing fight against inflation. <o:p></o:p>

Persistent risks and economic factors<o:p></o:p>

Hong warns that despite the easing of inflationary pressures, risks remain. <o:p></o:p>

Factors such as foreign exchange rates, critical for a country heavily reliant on imports, pose challenges. <o:p></o:p>

The depreciation of the won led the BOK to implement a larger-than-usual rate hike in late 2022. Consumer expectations for inflation, measured by an index, increased last month, adding to concerns. <o:p></o:p>

A resurgence in household debt further supports the case for continued efforts against potential asset bubbles. <o:p></o:p>

Government measures to boost the housing market clash with central bank efforts to curb debt appetite. <o:p></o:p>

Inflation figures for February are eagerly awaited, set for release early Wednesday.<o:p></o:p>

(With inputs from Bloomberg)<o:p></o:p>

South Korea's Central Bank, the Bank of Korea (BOK), is undergoing a shakeup in its policy board, raising concerns about future efforts to control inflation, warns a former policy director.

South Korea's Central Bank, the Bank of Korea (BOK), is undergoing a shakeup in its policy board, raising concerns about future efforts to control inflation, warns a former policy director. According to Bloomberg News, the impending departure of key members, Cho Yun-je and Suh Young Kyung, who played pivotal roles in the decision to raise interest rates in August 2021, is leaving the BOK with a leadership vacuum in the face of potential economic challenges. This development adds an element of unpredictability to the BOK's strategy in tamping down price pressure in case it resurfaces, given the departure of experienced figures who witnessed the adverse effects of aggressively eased policies. Early inflation fighters bid farewell The BOK's board reorganisation is part of one of the most substantial overhauls in years. Cho Yun-je and Suh Young Kyung, the only remaining members from the board that initiated the key interest rate hike in August 2021, are set to complete their four-year terms in April. Hong Kyungsik, the recently retired director general of the monetary policy department, emphasises their crucial role, stating, "They were there to witness the adverse effects of aggressively eased policy." Leadership vacuum raises concerns The departure of key figures from the BOK's board raises concerns about the institution's ability to navigate future challenges. Hong Kyungsik, who observed the decision-making process leading to the exit from the record-low rate of 0.5 per cent, notes the value of the experience in addressing financial imbalances in an ultra-low-rate environment. With Cho and Suh leaving, Governor Rhee Chang-yong and board member Shin Sung Hwan will be the sole members with pre-2023 experience, potentially heightening uncertainties in the board's decision-making process. Economic challenges and political landscape As South Korea gears up for parliamentary elections in April, the BOK faces challenges not only internally but also externally. The nominations for new board members typically involve consultation with the president's office, adding a political dimension to the central bank's restructuring. The elections are crucial to President Yoon Suk Yeol's policy agenda, shaping the economic landscape for the remainder of his term until 2027. Real estate concerns prompt caution The BOK, amidst the board reshuffle, is likely to grapple with credit risks associated with the real estate market. Hong points out that concerns related to the real estate sector influenced the bank's decision to slow the pace of tightening and maintain the interest rate at 3.5 per cent for most of 2023. Challenges in the construction industry, exemplified by the financial troubles of companies like Taeyoung Engineering & Construction Co., continue to test the board's direction in policymaking. Divergent views on interest rates Divergent views on interest rates within the BOK are evident, with an unidentified board member suggesting a possible rate cut in the next three months, a proposition Governor Rhee pushed back against, stating it would be challenging in the first half of 2024. Hong Kyungsik aligns with Rhee's perspective, emphasising that it is too early for the BOK to pivot, considering the ongoing fight against inflation. Persistent risks and economic factors Hong warns that despite the easing of inflationary pressures, risks remain. Factors such as foreign exchange rates, critical for a country heavily reliant on imports, pose challenges. The depreciation of the won led the BOK to implement a larger-than-usual rate hike in late 2022. Consumer expectations for inflation, measured by an index, increased last month, adding to concerns. A resurgence in household debt further supports the case for continued efforts against potential asset bubbles. Government measures to boost the housing market clash with central bank efforts to curb debt appetite. Inflation figures for February are eagerly awaited, set for release early Wednesday. (With inputs from Bloomberg)

Bank of Korea faces uncertainties amidst board shuffle, warns ex-director

North Korea's sanctions-hit economy shrank in 2018 by its largest margin since the country's devastating famine in the 1990s, the South's central bank said on Friday.

North Korea, which holds most of the peninsula's mineral resources, was once wealthier than its southern neighbour, but decades of mismanagement and the demise of its former benefactor the Soviet Union have left it deeply impoverished.

The isolated nation saw its gross domestic product contract 4.1 per cent last year, the second consecutive year of decline after a 3.5 per cent slump the year before, Seoul's Bank of Korea (BOK) said.

It was the worst drop since 1997, during the peak of a nationwide famine that saw hundreds of thousands -- some estimates say millions -- die of starvation.

The North does not publish economic statistics of its own, leaving outside estimates as the only available figures for its financial performance.&nbsp;

The UN Security Council in 2017 banned North Korea's main exports -- coal, fisheries and textile products, among others -- to cut off its access to hard currency in response to Pyongyang's pursuit of nuclear weapons and ballistic missiles.

The sanctions cut the North's exports by more than 85 per cent last year while the country's international trade fell in value by nearly half, the BOK said.

"On top of the sanctions, which really affected the North's export of textiles and minerals, we also think last year's heatwave played a factor in its agriculture industry," a bank official told AFP.&nbsp;

The country's gross national income in 2018 was estimated at 35.9 trillion won ($30.35 billion) -- just two per cent of that of the South. 
Its per capita income was $1,119 last year, while the South's was 26 times higher, according to the BOK.

Despite historic summits between North Korean leader Kim Jong Un and US President Donald Trump, nuclear negotiations between the two countries remain stalled, with the North firing two short-range missiles into the sea on Thursday.&nbsp; 
&nbsp;

North Korea's sanctions-hit economy shrank in 2018 by its largest margin since the country's devastating famine in the 1990s, the South's central bank said on Friday.

North Korea's sanctions-hit economy shrank in 2018 by its largest margin since the country's devastating famine in the 1990s, the South's central bank said on Friday. North Korea, which holds most of the peninsula's mineral resources, was once wealthier than its southern neighbour, but decades of mismanagement and the demise of its former benefactor the Soviet Union have left it deeply impoverished. The isolated nation saw its gross domestic product contract 4.1 per cent last year, the second consecutive year of decline after a 3.5 per cent slump the year before, Seoul's Bank of Korea (BOK) said. It was the worst drop since 1997, during the peak of a nationwide famine that saw hundreds of thousands -- some estimates say millions -- die of starvation. The North does not publish economic statistics of its own, leaving outside estimates as the only available figures for its financial performance. The UN Security Council in 2017 banned North Korea's main exports -- coal, fisheries and textile products, among others -- to cut off its access to hard currency in response to Pyongyang's pursuit of nuclear weapons and ballistic missiles. The sanctions cut the North's exports by more than 85 per cent last year while the country's international trade fell in value by nearly half, the BOK said. "On top of the sanctions, which really affected the North's export of textiles and minerals, we also think last year's heatwave played a factor in its agriculture industry," a bank official told AFP. The country's gross national income in 2018 was estimated at 35.9 trillion won ($30.35 billion) -- just two per cent of that of the South. Its per capita income was $1,119 last year, while the South's was 26 times higher, according to the BOK. Despite historic summits between North Korean leader Kim Jong Un and US President Donald Trump, nuclear negotiations between the two countries remain stalled, with the North firing two short-range missiles into the sea on Thursday.

North Korea economy shrinks most since 1990s famine: Seoul

bank-of-korea

Bank Of Korea, News on Bank Of Korea, stories on Bank Of Korea, articles on Bank Of Korea, Bank Of Korea stories at Wion, Bank Of Korea news, Bank Of Korea latest news

bank of-korea

Bank of Korea holds rate steady amid housing market concerns

Bank of Korea cuts rates to shield economy from Trump tariffs and political turmoil

Bank of Korea expected to maintain interest rates amid political shifts, inflation concerns

Bank of Korea faces uncertainties amidst board shuffle, warns ex-director

North Korea economy shrinks most since 1990s famine: Seoul