Not Even a Foreign Exchange Crisis... Is the 1400 Won per Dollar Level Becoming Fixed? [3-Minute Brief]

[At a Glance]
① Won value at its lowest level since the IMF financial crisis
② High exchange rate raises import prices, fueling consumer price inflation
③ Exchange rate fluctuates due to US Trump’s tariff policy

MARKET INDEX

○Trump announces 25% tariffs on steel and aluminum

○Steel stocks surge…US Steel up 4.79%

○Consumers maintain 1-year and 3-year inflation expectations at 3%

TOP 3 NEWS

■ The highest exchange rate in 26 years caused by low growth…Concerns over 1400 KRW stabilization

○Won value at its lowest level since the IMF financial crisis
○Economic deterioration followed by political turmoil driving up the KRW-USD exchange rate
○Without structural reforms, low growth will persist and high exchange rates cannot be prevented

■ "Even without spending a single dollar, ramen prices rise" Impact of exchange rate increase

○High exchange rate raises import prices → fuels consumer price inflation
○January inflation rate 2.2%…base effect present but high exchange rate threat remains
○Excessive exchange rate rise diminishes 'export effect'… "Warning sign for low growth"

■ High exchange rate continues this year…Need to prepare for 1500 KRW level

○Exchange rate fluctuates due to US Trump’s tariff policy
○Timing and intensity uncertain… "Volatility expected until first half of the year"
○'Boomerang' effect on US economy…Timing when strong dollar weakens

Graphic News: Economic difficulties and national treasury shortage... 31 trillion KRW tax revenue gap

○Reviewing '2024 total tax revenue and total expenditure'

○Half of the 31 trillion KRW tax revenue error is corporate tax… "Utilizing funds and unused budget"

○The national household ledger shows a 2 trillion KRW surplus but lacks supplementary budget ammunition

Law That Pays

■ Soldiers whose retirement pensions were cut due to reduced annual leave compensation during COVID-19… "Illegal calculation method"

○Claim that pension amounts are disadvantaged compared to soldiers discharged during other periods
○Court acknowledges flaws in retirement pension calculation method…Ruling in favor of plaintiff
○Claim that Military Pension Act enforcement decree is unconstitutional was not accepted

■ Red Cross sues for property tax exemption claiming social welfare business…Court "Dismissed"

○Claimed 25% property tax reduction under the Special Tax Treatment Control Act
○Court: Nonprofit corporation…Does not fall under Social Welfare Business Act
○"Plaintiff’s interpretation does not align with legislative intent"

■ "Need to adjust investigation authority of the Corruption Investigation Office and revise the 'direct relevance' clause in the Corruption Investigation Office Act"

○Emergency joint academic conference held regarding Yoon’s investigation
○"Revision work needed based on 'reasonable relevance'"
○"Criminal law interpretation must voice the correct perspective"

※ 'Law That Pays,' a content partnership corner between Asia Economy and Legal Newspaper, is published every Tuesday and Thursday.

Today's Key Schedule

○Domestic

11th KOSDAQ MotiveLink subscription, expected public offering price 5,100 KRW~6,000 KRW

○Overseas

01:00 Speech by Bundesbank’s Balz in Germany

09:01 UK Retail Consortium retail sales status (YoY) (January)

09:30 Australia National Australia Bank Business Confidence Index (January)

21:00 Brazil Consumer Price Index (YoY) (January)

21:15 Speech by Bailey, Governor of the Bank of England

22:30 Canada Building Permits (MoM) (December)

◇Lunch & Commute Weather

○ Lowest temperature -5℃(▲3℃) ｜ Highest temperature: 0℃(▲4℃)
○ Precipitation probability morning 0%｜afternoon 20%
○ Fine dust morning moderate｜afternoon moderate

OK in 3 minutes, essential time-efficient economic news. Published daily at 8 AM.