Weekly Economy Bulletin
Issued by Ministry of Strategy & Finance - Financial Services Commission - Bank of Korea
Week Ending December 28, 2008
MAJOR NEWS AND EVENTS
[MOSF] 4th Plan to Help Promote Public Enterprises’ Efficiency (December 19)
The Ministry of Strategy and Finance announced its 4th plan to promote public enterprises’ efficiency. The plan includes measures for 69 public enterprises to cut budgets of KRW1.7 trillion and sell assets worth KRW8.5 trillion in a bid to increase their competitiveness.
[MOSF] Korea Treasury Bond Issuance Schedule in January 2009 (December 26)
The Ministry of Strategy and Finance plans to issue Korea Treasury Bond worth between KRW5,890 billion and KRW6,773 billion in January 2009. The new issuance will be made through competitive auction, while up to 15 percent of it will be subject to non-competitive bidding.
[FSC] Detailed Plan to Improve Derivatives Market Supervision (December 22)
The huge task force team organized last July by the FSC and FSS with private and public financial bodies and financial experts finally produced a detailed plan called “Improvements in Derivatives Market Supervision” after a series of discussions, consultations and the IMF technical assistance.
[FSC] Hybrid Bonds to Raise Banks’ BIS Ratio (December 23)
In order to support banks’ capital base, the financial supervisory authorities decided to help raise BIS ratio by taking more hybrid bonds as banks’ Tier 1 capital from the former 15 percent of a total Tier 1 capital to 30 percent of it. With the measure, local banks’ capital reserves are expected to increase KRW15 trillion from KRW9.4 trillion to KRW24.4 trillion via hybrid debt issuance.
[FSC] Improved Accounting Rules for Foreign Currency Translation (December 23)
New accounting rules on foreign currency translation will be applied to help corporations and financial firms as they are expected to suffer a setback in their financial statements due to rapidly weakening won. The new rules allow both listed and unlisted large corporations to re-evaluate tangible assets, write accounting books in foreign currencies, apply risk aversion measures to financial products, and improve the accounting procedure in suspended risk aversion accounting for terminated contracts. Unlisted SMEs can apply the exchange rate of June 30, 2008 to assets and debts in foreign currencies owned as of June 30, 2008.
[FSC] Ministry of Knowledge Economy and FSC to Cooperate to Protect Real Economy as well as Financial Markets (December 24)
Out of necessity for building an organic cooperation system between real economy and finance sectors’ government officials, the FSC and Ministry of Knowledge Economy have agreed to launch “Support Team for Real Economy and Finance” (working title). The joint team, headed by high-ranking officials from the two organizations, will be cooperating to prevent a drastic slowdown of the domestic real economy and to protect growth engines of the Korean economy’s key industries.
[BOK] Introduction of Annual Chain-linking Method to the Korean National Accounts (December 22)
In accordance with 93 SNA recommendations, the Bank of Korea will adopt the annual chain-linking method (chained weighted method) for the compilation of real GDP statistics from March 2009.
[BOK] The Bank of Korea's Measures to Stabilize Financial Markets and Its Achievement (December 24)
Due to the Bank of Korea's base rate cut and expanded liquidity provision, the CD rate on December 24 entered the 3% range for the first time since December 7, 2005. Banks' lending rates are also expected to gradually decline. CP rates showed a sharp decline due to active credit investments by the securities firms eligible for open market operations.
[BOK] Expanding Eligibility for Secured Loans against Export Bills (December 26)
The Bank of Korea will temporarily expand the range of companies qualified for secured loans against export bills from small- and medium- sized enterprises to all enterprises in an effort to encourage domestic banks providing FX services in Korea to deal with export credit. The new measure will be effective from December 29, 2008 until the end of December 2009.
ANNOUNCEMENT ON UPCOMING RELEASES
[MOSF]
Industrial Activities in November, 2008 (Release Date: December 30)
Average Consumer Prices Index in 2008 and that in December (Release Date: December 31)
[FSC]
Keynote Speech for the Opening of the 2009 Securities and Futures Market (Release Date: January 2)
[BOK]
Trends of Weighted Average Interest Rates for December 2008 (Release Date: December 29)
Business Survey Index, December 2008 (Release Date: December 30)
Balance of Payments, November 2008 (Release Date: December 30)
New Year's Speech by Lee, Seongtae, Governor of the BOK (Release Date: December 31)
Official Foreign Reserves, December 2008 (Release Date: January 2)
