The Minute to Read (Weekend) series provides a quick overview of significant events in Korea from the week, conveniently condensed into a one-minute read. Here’s a recap of what happened this week: Sept. 16-20.
BOK under pressure for policy shift after U.S. Fed’s big rate cut
The U.S. Federal Reserve (Fed) implemented a “big cut” by lowering its benchmark interest rate by 0.5 percentage points on Sept. 18. This marks the first rate cut in 4.5 years since March 2020, when rates were urgently lowered to combat the COVID-19 crisis. With this big cut, the Fed has officially ushered in a new era of rate reductions, potentially sparking changes in global financial markets, including in South Korea.
There is growing anticipation surrounding the Bank of Korea’s (BOK) next move, as it remains one of the few central banks yet to pivot its monetary policy. The BOK is scheduled to hold a Monetary Policy Committee meeting in October to decide on the benchmark rate. With inflation stabilizing and domestic demand weakening, a rate cut may seem plausible. However, the BOK must also consider the possibility that lowering rates could further fuel rising housing prices in Seoul and household debt.
Senior employment in S. Korea overtakes youth for 1st time
For the first time in history, the number of employed South Koreans over 65 has surpassed those aged 15 to 29, a shift driven by the country’s rapidly aging population. With nearly 20% of the population now over 65, more seniors are staying or re-entering the workforce for financial reasons.
Statistics Korea reported on Sept. 19 that the average number of employed seniors aged 65 and older reached 3.94 million in the second quarter, surpassing the 3.87 million employed young adults. This demographic reversal is the first since employment data tracking began in 1989, when young workers (4.87 million) outnumbered seniors (382,000) by nearly 13 times. The rise in senior employment reflects South Korea’s deepening demographic challenges, including low birth rates and an aging population.
Samsung, SK Hynix stocks plummet despite U.S. Fed’s big cut
Samsung Electronics and SK Hynix both experienced sharp declines on Sept. 19 despite the U.S. Federal Reserve’s “big cut” during the Chuseok holiday. U.S. investment bank Morgan Stanley issued a report titled “Winter Looms,” slashing SK Hynix’s target price by 54%, from 260,000 won to 120,000 won. Samsung’s target price was also reduced by over 27%, from 105,000 won to 76,000 won.
Morgan Stanley pointed out that DRAM supply is expected to peak in the fourth quarter of this year and face oversupply until 2026. The potential oversupply of high-bandwidth memory (HBM), a key component in AI semiconductors, is expected to drive down prices.
MBK Partners pursues control of world’s top zinc smelter Korea Zinc
MBK Partners, a private equity firm based in Seoul, is seeking to acquire control of Korea Zinc, the world’s largest non-ferrous metal smelting company. Korea Zinc, a subsidiary of the Young Poong Group, has been at the center of a family dispute between the founding Choi and Jang families over new business ventures. The Jang family holds 33.13% of Korea Zinc, slightly more than the Choi family’s 15.65%. However, with the support of MBK Partners, the Choi family plans to buy additional shares to take control. MBK Partners aims to strip the Jang family of its management rights through this acquisition.
S. Korea’s instant noodle exports surge 32% to record high
South Korea’s instant noodle exports reached $800 million from January to August, marking a 32% increase compared to the same period last year. This growth is expected to help surpass the 1 trillion won export milestone two months earlier than last year. China was the largest market, with exports rising by 27% to $160 million, followed by the U.S., where exports surged by 62% to $140 million. South Korean instant noodle exports have set record highs for nine consecutive years since 2015, with the total export value projected to exceed 1.5 trillion won this year.
Action thriller ‘I, the Executioner’ surpasses 4.45 million viewers in 6 days
The action crime flick “I, the Executioner” has attracted over 4.45 million viewers in just six days. According to the Korea Film Council, it drew 738,643 moviegoers on Sept. 18 alone.
This long-awaited sequel to the 2015 blockbuster “Veteran” follows veteran detective Seo Do-cheol, played by Hwang Jung-min, as he teams up with rookie detective Park Sun-woo, portrayed by Jung Hae-in, to hunt down a serial killer.
The film has outperformed “Veteran” (9 days) and other recent hits like “Exhuma” (9 days), “The Roundup” (7 days), and “12.12: The Day” (12 days). Its box office success was further boosted by a solo release during this year’s 5-day Chuseok holiday.
N. Korea fires multiple short-range ballistic missiles
North Korea fired several short-range ballistic missiles on Sept. 18, just five days after unveiling a facility for producing highly enriched uranium (HEU), which is used for nuclear warheads, according to South Korea’s military.
South Korea’s Joint Chiefs of Staff reported detecting the missiles around 6:50 a.m. from the Gaecheon area in North Pyongan Province. The military is analyzing the missile specifications and has enhanced surveillance and information-sharing with the U.S. and Japan. This launch follows a previous missile test on Sept. 12 and the disclosure of the HEU facility on Sept. 13. North Korea has also sent trash-filled balloons across the border on several occasions this month, including Sept. 4-8, 11, and 14-15.
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