Korean economy fell into ant hell
"Made a currency swap with Japan" opportunism
https://www.dailyshincho.jp/article/2919/05211700/?all=1
May 21 , 2019 鈴置高史( Takabu-miSuzu-oki ) / Korean Observer
KoreaAntHelMadeCurrencySwapWithJapanOpportunism3
KoreaAntHelMadeCurrencySwapWithJapanOpportunism2
KoreaAntHelMadeCurrencySwapWithJapanOpportunism1
蟻地獄に堕ちた韓国経済「日本と通貨スワップを結ぼう」ご都合主義
蟻地獄に堕ちた韓国経済「日本と通貨スワップを結ぼう」ご都合主義2
蟻地獄に堕ちた韓国経済、 「日本と通貨スワップを結ぼう」ご都合主義3
In Korea, there are voices saying,
" Korea should borrow the dollar from Japan ."
This is because the won won't stop and concerns over
the currency crisis have risen.
Will Japan help Korea again this time?
Trade in the upper and middle of May is deficit
On May 21st ,
the Korean foreign exchange market ended in the lower $ 1 = 1901 won,
closing at 1194.00 won, up 0.20 won from the previous day.
Korean monetary authorities are considered
to have a defense line at $ 1 = 1200 won .
If this is exceeded, the market is seeing
that won selling may hit an avalanche .
Wong is now fluttering daily in front of the " dangerous water area ".
On May 20 ,
Deputy Prime Minister and Minister of Planning and Finance, Hon. Namugi
"If there is excessive bias in financial markets,
we will maintain market stability through appropriate measures."
Intervention with the mouth reduced Won selling.
On the other hand, customs statistics on May 21st , announced on May 21 ,
provided material for Won selling.
Exports from May 1st to 20th were sluggish at $ 25.72 billion,
a decrease of 11.7 % over the same period last year.
Semiconductor exports, which accounted for 20% of exports,
were slumping at 33.0 % .
By destination, China,
which had been responsible for around 25 %, was down 15.9 % .
Imports were $ 27.66 billion, down 0.1 percent from the previous year,
and the trade balance was $ 1.96 billion.
Cumulative exports
from January 1 to May 20 decreased 7.5 percent to $ 207.210 billion.
Imports, meanwhile, fell 3.9 percent to $ 195.04 billion.
The trade surplus remains at $ 11.27 billion,
well below $ 70 billion a year in 2018 .
Korea has had a currency crisis
when it has fallen into a trade deficit and its surplus has fallen sharply .
（「 韓国、輸出急減で通貨危機の足音 日米に見放されたらジ・エンド？1
Fiscal deficit is a new concern
The market has also begun to pay attention as a growing deficit.
President MoonJae-in became Deputy Prime Minister Hon. Namugi
at the National Strategy Conference held on May 16
" What is the basis for setting
the ( upper limit on government debt ratio ) to 40 % "
And ordered to abolish it.
Korean financial authorities have traditionally kept
the government debt ratio below 40 %.
However,
with the direction of the president this time,
it has become certain
that Korea ’s government debt ceiling will be broken.
In preparation for the April 2020 general election,
the MoonJae-in government plans
to carry out public works extensively throughout the country.
If the budget is not enough,
it will supplement the government bonds more often.
The bell was ringing for the expansion of the fiscal deficit.
Korea Daily is Export Dependent Korea,
Rating Drops If Government Debt Exceeds 40 %
「ExportRatingFallsKoreagovernmentDebtExceeds40%
"Moody's rating company
is paying attention to Korea's fiscal deficit "
Pointed out.
Besides the sharp decline in exports,
the driving force of the Korean economy, real estate prices also fell.
Revenues are expected to decline in the future,
with the tax revenue of February 2019 also decreasing
by 1.300 billion won ( 1995 billion yen , about $ 1.1 billion )
compared to the same month last year .
"Because I'm trying
to organize the Baramaki budget without funding measures ."
He wrote.
Chart 7 Currency swaps held by Korea with foreign countries
|
Destination country and amount |
US dollar equivalent |
Korea offer |
|---|---|---|
|
Australia (A $ 10 billion) |
About $ 7.181 billion |
9 trillion won |
|
Switzerland (CHF 10 billion) |
About $ 10.76 billion |
11.2 trillion won |
|
Malaysia ( 15 billion ringgit) |
About $ 3.57 billion |
5 trillion won |
|
Indonesia (Rp 115 trillion) |
About $ 79.3 billion |
11 trillion won |
|
total |
About $ 287.64 billion |
36.2 trillion won |
([Source]
Author created in reference to websites of central banks of each country.
The exchange rate is as of 2018/12/18 )
Besides the swaps shown in Figure 7
Chart 8 shows
the currency swap agreements that Korea claims to " hold ".
Chart 8 Swaps other than currency swaps
|
Other countries and amounts |
US dollar equivalent |
Remarks |
|---|---|---|
|
China ( 360 billion RMB) |
About $ 503.4 billion |
It expired on October 10 last year, The Chinese side has not said that it " extended " |
|
Canada |
Limit amount not set |
Swap with Canada is not a currency swap Currency swap |
|
CMIM |
$ 38.4 billion |
Do not activate the IMF delink clause The withdrawal limit is $ 11.52 billion |
([Source] author creation)
In other words, among the three swaps shown in
In fact, it is useful in times of crisis
Chiang Mai Initiative Multilateral Agreement ( CMIM )
Based on the delink limit ( $ 11.52 billion ).
That is, if you consider Figure 7 and Figure 8 together,
If a currency crisis strikes Korea,
A $ 10 billion with Australia ( approximately $ 7.181 billion )
CHF 10 billion with Switzerland ( about $ 10.76 billion )
CMIM Delink Limit $ 11.52 billion
Total of about $ 28 billion
can be used as a way to save Korea from the crisis,
Again, compared to "
at least $ 120 billion in foreign currency shortages "
To be honest, it is " liketry to empty the ocean with a thimble ".
Central and South American types also coexist
The Korean economy is Quadruple intense Hardship.
Since 2017 ,
the proportion of the working-age population has fallen
and the negative effects of the declining birthrate
and aging population have emerged.
The total population is expected to peak in 2019 .
The scale of the economy itself has begun to shrink
（「Moon,sPolicyUSKoreaRelationshipDecayDayOfRuin1
Moreover, exports fell sharply and the trade surplus sharply dropped ,
owing to stagnant semiconductor prices
and the effects of the US-China Economic War.
（「KoreaWonRateNoStopFallingSufferingConsequences1
ウォン安が止まらない韓国、日米の助けも絶望的の自業自得1」reference）
Investors who question the future of the Korean economy
have begun to sell won and Korean stocks .
If it leads to a large-scale capital flight ,
a default due to a shortage of foreign currency may occur.
It is a currency swap that prevents that,
but Korea has not signed a bilateral swap agreement
to obtain the US dollar (see Chart: Korean Swaps).
In the crisis of 2008 and 2011 ,
Korea could not afford to borrow dollars
from Japan or the United States.
Now, however,
South Korea is apparently assisting North Korea's nuclear armament.
The market doubts
whether the US or Japan will play a swap and lend a dollar or yen.
（「WonPlungingAnti-US-JapaneseLaterPaidByMoonJaein1
ウォン急落防衛ライン突破 文在寅が払わされる反米・反日のツケ1」reference）
A new illness called " budget deficit "
was added to such triple intense Hardship.
So far, the Korean currency crisis has arisen
from the lack of dollars in the private sector .
In addition, South Korea also faced a Latin American crisis arising
from concerns that the government could not return debt .
Moody's delegation visited Korea in April and screened the Korean economy
in detail through interviews with key figures.
It is expected
that a new rating reflecting the examination will be released in June.