{"id":2204373,"date":"2024-03-22T08:00:43","date_gmt":"2024-03-21T23:00:43","guid":{"rendered":"https:\/\/koreapro.org\/?p=2204373"},"modified":"2024-03-21T17:29:41","modified_gmt":"2024-03-21T08:29:41","slug":"south-koreas-soft-landing-plan-faces-headwinds-amid-fed-rate-freeze","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/03\/south-koreas-soft-landing-plan-faces-headwinds-amid-fed-rate-freeze\/","title":{"rendered":"South Korea\u2019s soft landing plan faces headwinds amid Fed rate freeze"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">South Korea\u2019s Ministry of Economy and Finance held an <\/span><a href=\"https:\/\/www.moef.go.kr\/nw\/nes\/detailNesDtaView.do?searchBbsId1=MOSFBBS_000000000028&amp;searchNttId1=MOSF_000000000068176&amp;menuNo=4010100\"><span style=\"font-weight: 400;\">emergency meeting<\/span><\/a><span style=\"font-weight: 400;\"> on Thursday to assess the impact of the U.S. Federal Reserve\u2019s decision to freeze interest rates on domestic and global financial markets. The meeting, chaired by finance minister Choi Sang-mok, included officials from the Bank of Korea, the Financial Services Commission and the Financial Supervisory Service.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The ministry noted that while the Fed\u2019s decision contributes to international financial market stability, potential risks in non-bank financial institutions and real estate project financing remain manageable. To facilitate an orderly soft landing, the government plans to expand loan guarantees, broaden support for normalization funds, and promote market-driven restructuring by revising assessment standards and amending lead bank agreements.<\/span><\/p>\n<p><b>Why It Matters<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Despite the finance ministry\u2019s assurance that it seeks an orderly soft landing, the Bank of Korea (BOK) <\/span><a href=\"https:\/\/www.bok.or.kr\/eng\/bbs\/E0000628\/view.do?nttId=10082968&amp;menuNo=400215&amp;pageIndex=1\"><span style=\"font-weight: 400;\">warned<\/span><\/a><span style=\"font-weight: 400;\"> last week that private consumption saw weakened recovery momentum due to a continuing slump in goods and a slowdown in services affected by elevated inflation and interest rates. Further, the Fed\u2019s decision to further freeze interest rates will likely compel the BOK to maintain its interest rates, which will likely extend the construction industry\u2019s <\/span><a href=\"https:\/\/www.chosun.com\/english\/industry-en\/2024\/03\/07\/DADZMQY335CJTFM266OBY5XBPI\/\"><span style=\"font-weight: 400;\">ongoing slump<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Financial institutions tightened their lending to construction companies since <\/span><a href=\"https:\/\/koreapro.org\/2024\/01\/south-koreas-major-builder-turns-to-asset-collateral-amid-soaring-debts\/\"><span style=\"font-weight: 400;\">Taeyoung Engineering &amp; Construction Company<\/span><\/a><span style=\"font-weight: 400;\"> faced a <\/span><a href=\"https:\/\/www.chosun.com\/english\/industry-en\/2023\/12\/28\/KBFDS7HUQBALPPZR6QKCSRCFYE\/\"><span style=\"font-weight: 400;\">liquidity crisis<\/span><\/a><span style=\"font-weight: 400;\"> \u2014 spurred by real estate project financing loans \u2014 in December. South Korea\u2019s economy might fail to reach its 2% growth target this year if interest rates remain high.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>South Korea\u2019s Ministry of Economy and Finance held an emergency meeting on Thursday to assess the impact of the U.S. Federal Reserve\u2019s decision to freeze interest rates on domestic and global financial markets. The meeting, chaired by finance minister Choi Sang-mok, included officials from the Bank of Korea, the Financial Services Commission and the Financial [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2204374,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24],"class_list":["post-2204373","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>South Korea\u2019s soft landing plan faces headwinds amid Fed rate freeze - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2024\/03\/south-koreas-soft-landing-plan-faces-headwinds-amid-fed-rate-freeze\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Korea\u2019s soft landing plan faces headwinds amid Fed rate freeze - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"South Korea\u2019s Ministry of Economy and Finance held an emergency meeting on Thursday to assess the impact of the U.S. Federal Reserve\u2019s decision to freeze interest rates on domestic and global financial markets. 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