South Korea Analysis

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Currency Forecast - KRW: Long-Term Appreciatory Trajectory Still Intact - NOV 2017

We remain neutral on the KRW in the near term as the currency continues to test key technical resistance while geopolitical tensions remain high. Over the longer term, we expect the currency to appreciate slightly as it remains supported by positive growth-inflation dynamics, a still-undervalued real effective exchange rate, and a strong external position.

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Industry Trend Analysis - Online Banks To Be A Catalyst For Fintech Disruption - OCT 2017

The provision of a banking license to Kakao Bank marks a further step in the development of the fintech industry in South Korea and is likely to see banks push for greater deregulation amid a difficult operating environment as the rise in online banking poses a threat to conventional banks. We believe that the provision of a license will be positive for the development of more digital services...

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Economic Analysis - Supplementary Budget Beginning Of Shift Towards Increased Spending - SEPT 2017

While we do not expect South Korea's proposed supplementary budget to have an impact on the government's fiscal position, the speed by which the government has drawn up the proposal indicates the importance of job creation and marks the beginning of a shift towards one of increased spending. We maintain our expectations for the country's 2017 operating fiscal deficit to come in at 1.7% of GDP...

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Currency Forecast - KRW: Shifting To An Appreciatory Bias - AUG 2017

A widening real yield differential with the US due to very low inflation expectations, and the significant change in the trajectory of the Chinese yuan have improved the outlook for the Korean won, and we are shifting to an appreciatory bias. We have upgraded our 2017 average forecast to KRW1,160/USD from KRW1,250/USD previously, and forecast further mild appreciation beyond this.

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Political Risk Analysis - New President, Same Challenges - JULY 2017

The election of Moon Jae-in as South Korea's new president is unlikely to lead to a significant improvement in the country's domestic policy environment, with the new president's The Minjoo Party of Korea lacking a majority in parliament. Moon has espoused a more interventionist style of government, but we expect him to face difficulties in implementing his policies given the structural nature...

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