{"id":2201237,"date":"2023-06-01T19:42:08","date_gmt":"2023-06-01T10:42:08","guid":{"rendered":"https:\/\/koreapro.org\/?p=2201237"},"modified":"2023-06-02T17:43:25","modified_gmt":"2023-06-02T08:43:25","slug":"from-boom-to-gloom-rising-interest-rates-deliver-blow-to-south-korean-startups","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/06\/from-boom-to-gloom-rising-interest-rates-deliver-blow-to-south-korean-startups\/","title":{"rendered":"From boom to gloom: Rising interest rates deliver blow to South Korean startups"},"content":{"rendered":"
As nations across the globe grapple with soaring inflation, South Korea finds itself in an anomalous economic situation.\u00a0<\/span><\/p>\n While inflation hit a 14-month low of <\/span>3.7%<\/span><\/a>, far below the dizzying <\/span>9.1%<\/span><\/a> seen in the U.S. last June or the U.K.\u2019s <\/span>10.1%<\/span><\/a>, Seoul has still had to respond to a worldwide monetary tightening cycle by <\/span>raising<\/span><\/a> interest rates. And this decision has delivered a blow to South Korea\u2019s vibrant startup scene.<\/span><\/p>\n Given the speed at which the Federal Reserve and other major central banks are raising interest rates to counter inflation, South Korea found it necessary to follow suit. The logic behind this move was straightforward \u2014 <\/span>to protect<\/span><\/a> the Korean won. The U.S. dollar, considered one of the world\u2019s safest financial assets, could provide foreign investors with better yields than the riskier Korean won, potentially leading to a run on South Korea\u2019s currency.<\/span><\/p>\n But while raising interest rates to the current <\/span>3.5%<\/span><\/a> may have prevented this, the significant consequences of the decision are becoming increasingly clear.\u00a0<\/span><\/p>\n STARTUP WOES<\/b><\/p>\n