Seoul central bank lowers rate as growth forecast cut

The Bank of Korea cut its policy rate for the first time in three years amid escalating trade tensions with Japan and moves by Tokyo to tighten export controls to South Korean firms. (AP)
Updated 18 July 2019

Seoul central bank lowers rate as growth forecast cut

  • The Bank of Korea lowered its key interest rate by a quarter percentage point to 1.5 percent

SEOUL: South Korea’s central bank on Thursday cut its policy rate for the first time in three years to shore up growth threatened by a trade dispute with Japan.

The Bank of Korea lowered its key interest rate by a quarter percentage point to 1.5 percent following a meeting of its monetary policy committee, which also cut its growth forecast for the country’s economy this year from 2.5 percent to 2.2 percent.

The bank cited slowing exports and domestic investment and volatility in financial markets related to the trade war between the US and China and Japanese curbs on certain technology exports to South Korea. The bank had hiked the rate by 0.25 percentage points in November and last lowered borrowing costs in June 2016.

The bank said in a statement it will “carefully monitor developments such as the US-China trade dispute, Japan’s export restrictions, any changes in the economies and monetary policies of major countries ... and geopolitical risks, while examining their effects on domestic growth and inflation.”

Lee Ju-yeol, the bank’s governor, said South Korea’s exports and domestic investment during the first half of the year were more sluggish than expected and that it’s “hard to be optimistic about the (economic) conditions moving forward.”

The rate cut came amid escalating tensions between South Korea and Japan over Tokyo’s move to tighten controls on the exports of photoresists and two other chemicals to South Korean companies that use them to produce semiconductors and display screens for smartphones and TVs.

South Korea says the Japanese trade curbs could hurt its export-dependent economy and disrupt global supply chains. Lee said the bank’s monetary policymakers assessed how the trade dispute could affect growth at the macroeconomic level.

South Korea has accused Japan of weaponizing trade to retaliate against South Korean court rulings calling for Japanese companies to compensate aging South Korean plaintiffs for forced labor during World War II.

Tokyo says the materials affected by the export controls can be sent only to trustworthy trading partners. Without presenting specific examples, it has questioned Seoul’s credibility in controlling the exports of arms and items that can be used both for civilian and military purposes.

South Korea is also bracing for the possibility that Japan will take further steps by removing it from a 27-country “whitelist” receiving preferential treatment in trade.

Its removal from the list would require Japanese companies to apply for case-by-case approvals for exports to South Korea of hundreds of items deemed sensitive, not just the three materials affected by the trade curbs.


Getting more women into leadership positions top priority: CEO

This June 23, 2018 photo, shows a general view of Riyadh, Saudi Arabia. (AP)
Updated 18 January 2020

Getting more women into leadership positions top priority: CEO

  • Saudi Arabia is focusing on the Business 20 (B20), making this one of the key engagement groups. Women in Business will be Saudi Arabia’s signature topic

RIYADH: The boss of one of Saudi Arabia’s biggest banks says that getting more women into leadership positions is a top priority.
Samba CEO Rania Nashar chairs the action council for Women in Business created by the Business Twenty (B20), which is the official G20 dialogue with the business community. It represents the global business community across all G20 member states and all economic sectors.
She said the council was set up to boost women’s particpation not only in business but also in global leadership positions.
During the launch of the B20 in Saudi Arabia this week, Nashar highlighted the under-representation of women in the economy.
“There is a gap of 27 percent between male and female workers; 75 percent of males are part of the labor force while only 48 percent of females are working,” she said.
She said it was important not to just talk about women as workers but as business owners.

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Saudi Arabia will host the 15th G20 Summit in Riyadh on Nov. 21-22, 2020.

“That’s why entrepreneurship is very fundamental to our task force,” she said.  “The majority of the finance development programs have incentives for giving loans to females; however, despite the fact that many large borrowers are females, the amount of loans granted to them is far below what is granted to males,” she added.
Nashar said that two-thirds of female business founders feel that they were not taken seriously by investors when they pitch for investments. They also feel that they are treated differently from their male counterparts.
Saudi Arabia will host the 15th G20 Summit in Riyadh on Nov. 21-22, 2020. The Kingdom is focusing on the Business 20 (B20), making this one of the key engagement groups. Women in Business will be Saudi Arabia’s signature topic.