South Korea's deputy finance minister discussed forex with US Treasury official
SEOUL :South Korea's deputy finance minister Choi Ji-young met with Assistant Secretary for International Finance at the U.S. Treasury, Robert Kaproth, to discuss the dollar/won market on May 5, a South Korean government official said on Wednesday.
The two met on the sidelines of the 58th ADB Annual Meeting in Milan, Italy, after Seoul and Washington said in April they would try to come up with a trade package aimed at removing U.S. tariffs before a pause on reciprocal tariffs is lifted in July.
The U.S. and South Korea on April 25 agreed to craft a trade package going forward where tariffs, economic security, investment and forex policies would be discussed.
On Wednesday, the won gained 1.4 per cent against the dollar to 1,398.40 as of 0830 GMT, extending gains to breach the key psychological level of 1,400 per dollar.
The won was the worst performer among emerging Asian currencies last year, having fallen more than 14 per cent against the dollar.
"News that U.S. and South Korea are discussing forex could be part of the reason why the won is up, but we need to monitor further to see flows behind this as the gains were quite substantial in the afternoon," a local forex dealer said, asking not to be named due to the sensitivity of the matter.
U.S. Trade Representative Jamieson Greer is due to meet Ahn Duk-geun, Seoul's trade minister, on Friday on the sidelines of the APEC meeting in South Korea to discuss a broad range of trade issues, according to officials.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
an hour ago
- CNA
MBK plans to sell its troubled Korean supermarket chain Homeplus
SEOUL :MBK Partners, a Northeast Asia-focused private equity firm, said on Friday it is seeking to put up for sale its embattled South Korean supermarket chain Homeplus to avert the retailer's liquidation. In March, MBK Partners filed for a court-led restructuring of South Korea's No. 2 grocery retailer to avoid bankruptcy of the firm, which has been reeling from the pandemic and rising competition from e-commerce rivals. MBK Partners said a recent review commissioned by the court showed that its liquidation value is higher than the going concern value. MBK Partners said the retailer plans to issue new shares and sell them to a buyer, while MBK will cancel the 2.5 trillion Korean won ($1.83 billion) worth shares it currently owns. The private equity firm struck the deal to buy Homeplus in 2015 from Britain's Tesco for 4 billion pounds. South Korean prosecutors are investigating whether MBK Partners approved Homeplus's debt issue in 2025 despite prior knowledge of a credit downgrade for the retailer. MBK has denied the allegation. Prosecutors imposed in May a foreign travel ban for the chairman of MBK Partners, Kim Byung-ju, as part of the probe. ($1 = 1,369.6 won)
CNA
an hour ago
- CNA
Trump-Albanese G7 meeting in limbo as ties sour over Israeli sanctions, AUKUS pact
CANBERRA: Highly-anticipated plans for Australian Prime Minister Anthony Albanese to hold face-to-face talks with United States President Donald Trump at the upcoming Group of Seven (G7) summit are in limbo. Canberra's sanctions on two Israeli cabinet members and a new US review of a defence pact with Australia and the United Kingdom have cast doubt on whether the crucial meeting would take place. Albanese was expected to meet Trump for the first time on the sidelines of the G7 leaders' summit, which kicks off on Sunday (Jun 15) in Alberta, Canada, to discuss trade, tariffs and military spending. This is the first big diplomatic test for Albanese since Australia's Labor government was re-elected last month. Australia on Tuesday joined Britain, Canada, New Zealand and Norway in a coordinated action to impose sanctions on two Israeli cabinet ministers, accusing them of repeatedly inciting violence against Palestinians in the West Bank. The move drew condemnation from Washington. On defence, Trump wants Canberra to increase its military spending from 2 per cent of its gross domestic product to at least 3.5 per cent. Albanese had previously said his government is already raising defence spending to 2.3 per cent and has declined to commit to the US target, saying Australia would focus on capability needs. Jennifer Parker, an expert associate at the Australian National University's National Security College, said: 'I don't think we should be increasing defence spending because the US says so. 'Australia should be increasing defence spending because we have assessed there's an increased risk in the region and our capability, our defence force is not resourced to meet that risk." AUSTRALIA-US DEFENCE TIES Australia has a long-standing military alliance with the US. Canberra in 2023 committed to spending A$368 billion (US$250 billion) over three decades on AUKUS, Australia's biggest ever defence project with the US and Britain, to acquire nuclear-powered submarines. But the Trump administration recently launched a formal review of the defence pact. Australia's Defence Minister Richard Marles said on Thursday he was confident the submarine deal would proceed. Domestically, questions have risen over the agreement and its effect on the overall military budget. "The Australian defence spending is being cannibalised by its contributions to AUKUS. It's overwhelming the budget for all the other conventional parts of the Australian defence forces,' said James Curran, a modern history professor at the University of Sydney. Parker, who is a former anti-submarine warfare officer, acknowledged AUKUS' value but warned it must be part of a broader defence strategy. 'When you think about the defence of Australia you really need to think about not the defence of Australian territory but the defence of Australia's vital interests. Much of that exists in the maritime domain,' she told CNA. 'When it comes to protecting the maritime domain, nuclear powered submarines, which are submarines that can go incredibly fast, are a key asset for Australia." TRADE AND TARIFFS Aside from defence, trade tensions loom large – particularly over the 50 per cent tariff imposed on Australian steel, which Albanese hopes to raise with Trump. The Australian Steel Institute said the real danger facing the country's steel industry due to the tariff hike is dumping by other countries such as China. "Steel is a globally traded commodity. If countries or businesses can't find a home in the US for their exports, they will look elsewhere,' said the institute's CEO Mark Cain. 'We're an open trading nation and so the risk for our industry is quite pronounced if we become a dumping ground for that surplus steel that would be awash in the global market.' There are also geopolitical concerns over regional instability triggered by America's strategic plans in the Indo-Pacific and Australia's role as an ally. "The (Trump) administration hasn't played all its geo-political cards in Asia yet. I don't think the US is leaving the region or preparing to withdraw,' said Curran. 'But I think (Washington) is making an assessment deep down about what the costs of a potential conflict with China might mean. And that may well be uncomfortable for US allies in this part of the world."
CNA
2 hours ago
- CNA
ASEAN eyes rail connectivity to boost regional trade amid global tensions
KUALA LUMPUR: As global trade faces challenges from tariffs amid renewed rivalry, the Association of Southeast Asian Nations (ASEAN) is turning its attention inward to strengthen regional connectivity. Experts said expanding intra-ASEAN trade hinges on improving rail links, with collaboration among member states key to unlocking the success of the ASEAN Rail Corridor that was launched last year. A seamless and reliable regional rail freight service is seen as vital to boosting the bloc's total trade volume, which is projected to reach US$4.5 trillion by 2030. LAOS-CHINA RAILWAY For example, the Laos-China Railway – which links Vientiane to Kunming – was officially launched in December 2021. Built at a cost of almost US$6 billion, it is part of China's Belt and Road Initiative. The Laos section spans over 400km, while the China stretch to Kunming spans almost 600km. Rail experts said that this may usher in a new era in rail travel for ASEAN. "(It could be) a high-speed train that you could take … from Beijing all the way down through to Vientiane, all the way down to Bangkok, all the way down to Kuala Lumpur, and possibly divert through an undersea tunnel to Jakarta. I think it's not impossible to imagine that at all,' said Suhaimi Yaacob, chief corporate officer of Malaysian railway company KTMB. Laos, the only land-locked country in ASEAN, has already benefited significantly since the railway began operations. Last year, tourist arrivals in the country increased more than 30 per cent to 4 million. The Thanaleng Dry Port, which was the first international inland port in Laos, began operations in tandem with the railway launch. Since then, it has handled more than 200,000 twenty-foot equivalent units (TEUs) – a general unit of cargo capacity that represents the space occupied by a standard 20-foot shipping container. Last year, the volume of TEUs it handled grew by 30 per cent from 2023. Shipments passing through Thanaleng are bound not only for China but also markets in the Middle East, Central Asia, and Europe. A notable technical challenge at the port is the difference in rail gauges between Laos and Thailand. Laos' rail system, built by China, uses a standard gauge, while Thailand and Malaysia use a metre gauge. This means cargo arriving at Thanaleng must be transferred to another train continue its journey. On average, it takes about two to three minutes to move a single container box. In rail transport, track gauge refers to the distance between the two rails of a railway track. Several different track gauges exist worldwide, presenting a barrier to wider seamless operation on rail networks. Nevertheless, Thanaleng Dry Port's managing director Sakhone Philangam told CNA the gauge change is manageable. "This location is ideal for consolidation (of goods). For example, you cannot (always) match the timing, (if) there is a delay in connection, we can always store your container here safely," he said. In April, the dry port signed a memorandum of understanding with Malaysia's soon-to-be-operational Perlis Inland Port, located at the Thai-Malaysian border. Malaysia is investing over US$90 million in the facility, which is expected to handle up to 300,000 container boxes annually when it is ready in mid-2026. ASEAN RAIL EXPRESS STALLS But Malaysia, the chair of ASEAN this year, is facing significant obstacles in facilitating smooth rail trade. Disparate standards in cross-border customs clearance led to the double handling of cargo on the ASEAN Rail Express – a cargo rail service launched mid last year that aims to connect Malaysia to the Chinese city of Kunming via Thailand and Laos. The need to change train gauges mid-route also added to delays and confusion. As a result, the ASEAN Rail Express failed to take off – the service was suspended barely a few months after its launch. 'If you need to physically check the cargoes in each border, that will slow down the process,' noted Malaysia's Transport Minister Anthony Loke. In May, Loke met with his Thai counterpart in Bangkok to form a joint ministerial committee tasked with improving trade facilitation for goods in transit. The cooperation plan includes technical collaboration and joint procurement of trains to achieve better value. The Thai authorities have also pledged to ease legal obstacles and streamline procedures at customs. 'Every country wants to protect itself from competition but we must look at the bigger picture when we are facing this kind of geopolitical tension right now,' said Loke. 'Among member states of ASEAN we have to break down barriers, we have to cooperate and corroborate among each other more so that we can grow together. ASEAN cannot look at each other as a threat. We have to look at each other as partners.' Industry players told CNA they are looking forward to the resumption of the ASEAN Rail Express, which could reduce travel time by up to 40 per cent compared with sea shipping. 'It's probably the cheapest way for us to export our products to either Thailand, Malaysia or maybe Singapore,' said Stanley Yu, deputy CEO of Shanghai Guohui Green Technology. Watcharaporn Phootong, CEO of Kuala Lumpur-based food and beverage exporter Andamex, said: 'I prefer to use train – save more time, save more cost, and reduce the damage that may be incurred. Even though I have to pay a bit more, it's a good trade off.'
