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South Korea commonly referred to as Korea, is a sovereign state in East Asia, constituting the southern part of the Korean Peninsula. The name Korea is derived from the ancient Kingdom of Goguryeo, also known as Koryŏ. Half of the population live in the Seoul Capital Area, the world's second largest city with over 25 million residents and a leading global city with the fourth largest economy, rated in 2016 as the world's most livable megacity and safest city to live in. Highly mountainous, South Korea is a popular winter sports destination in Asia, hosting the 2018 Winter Olympics.
South Korea's financial sector in the late 1980s included a diversified commercial banking system, a securities market, and a wide range of secondary financial institutions. The banks kept pace with the rest of the economy, particularly after the liberalization and modernization of financial institutions in the mid-1980s and the establishment of the capital market system based on the Fifth Five-Year Economic and Social Development Plan.
The Bank of Korea was established as the central bank on June 12, 1950. Its major functions included the issuance of all currency; the formulation and execution of monetary and credit policies; the conduct of the bulk of foreign exchange control business; the research, collection, and preparation of statistics on many aspects of South Korea's financial system; and the supervision and regulation of the activities of private banks. The Bank of Korea engaged in loan and deposit transactions for the government; additionally, the bank transacted various government business activities. It also made loans to and received deposits from other banking institutions; all banks maintained their solvency through balances at the Bank of Korea.
Three other financial development institutions supplied credit for business and government projects. The Export-Import Bank of Korea extended medium- and long-term credit to both suppliers and buyers to facilitate exports of capital goods and services, major resources development, and overseas investment. The Korea Development Bank, which was the government's shareholder in state-run enterprises, raised funds from the government as well as from international financial institutions and foreign banks to fund key industries and infrastructure projects. The Korea Long-Term Credit Bank financed equipment investment.
|Agriculture||Rice, root crops, barley, vegetables, fruits, cattle, chicken, milk & eggs.|
|Manufacture||Ships, automotive, construction equipment, graphite, coal, iron ore and other consumer durables.|
|Services (Including financial)||No Information|
|Hyundai Motor||Auto & Truck Manufacturers|
|Posco||Iron & Steel|
|Shinhan Financial Group||Investment Services|
|KIA Motors||Auto & Truck Manufacturers|
|Hyundai Mobis||Auto & Truck Parts|
|Samsung Life Insurance||Life & Health Insurance|
|KB Financial Group||Investment Services|
|Hana Financial Group||Banking|
|Passenger and cargo ships|
Korea Exchange (KRX) is the sole securities exchange operator in South Korea. It is headquartered in Busan, and has an office for cash markets and market oversight in Seoul. The Korea Exchange was created through the integration of Korea Stock Exchange, Korea Futures Exchange and KOSDAQ Stock Market under the Korea Stock & Futures Exchange Act. The securities and derivatives markets of former exchanges are now business divisions of Korea Exchange: The Stock Market Division, KOSDAQ Market Division and Derivatives Market Division. As of January 2015, Korea Exchange had 2,030 listed companies with a combined market capitalization of $1.2 trillion. On 22 May 2015, The Korea Exchange joined the United Nations Sustainable Stock Exchanges initiative in an event with the UN-SG Ban Ki-moon in attendance, as well as senior officials from UN Global Compact and UNCTAD.
The banking sector was burdened with non-performing loans as its large corporations were funding aggressive expansions. During that time, there was a haste to build great conglomerates to compete on the world stage. Many businesses ultimately failed to ensure returns and profitability. The chaebol, South Korean conglomerates, simply absorbed more and more capital investment. Eventually, excess debt led to major failures and takeovers.
For example, in July 1997, South Korea's third-largest carmaker, Kia Motors, asked for emergency loans. In the wake of the Asian market downturn, Moody's lowered the credit rating of South Korea from A1 to A3, on 28 November 1997, and downgraded again to B2 on 11 December. That contributed to a further decline in South Korean shares since stock markets were already bearish in November. The Seoul stock exchange fell by 4% on 7 November 1997. On 8 November, it plunged by 7%, its biggest one-day drop to that date. And on 24 November, stocks fell a further 7.2% on fears that the IMF would demand tough reforms. In 1998, Hyundai Motors took over Kia Motors. Samsung Motors' $5 billion venture was dissolved due to the crisis, and eventually, Daewoo Motors was sold to the American company General Motors (GM).
The South Korean won, meanwhile, weakened to more than 1,700 per U.S. dollar from around 800. Despite an initial sharp economic slowdown and numerous corporate bankruptcies, South Korea has managed to triple its per capita GDP in dollar terms since 1997. Indeed, it resumed its role as the world's fastest-growing economy—since 1960, per capita GDP has grown from $80 in nominal terms to more than $21,000 as of 2007. However, like the chaebol, South Korea's government did not escape unscathed. Its national debt-to-GDP ratio more than doubled (approximately 13% to 30%) because of the crisis.
Between 1962 and 1994, Korea's tiger economy soared at an average of 10% annually, fueled by annual export growth of 20%, in a period called the Miracle on the Han River that rapidly and successfully transformed it into a high-income advanced economy and the world's 11th largest economy by 1995. Today, it is the world's sixth largest exporter and seventh largest importer with the OECD's lowest unemployment level. Since the first free election in 1987, Koreans have enjoyed high civil liberties and Asia's most developed democracy, with all fundamental rights protected by a well-developed rule of law system that is rated best in East Asia. Despite the initial plan of a reunified Korea in the 1943 Cairo Declaration, escalating Cold War antagonism between the Soviet Union and the United States eventually led to the establishment of separate governments, each with its own ideology, leading to the division of Korea into two political entities in 1948: North Korea and South Korea.
Sun Myung Moon
(President / Lawyer, (1946-2009)
The won (KRW) or the Korean Republic Won is the currency of South Korea. A single won is divided into 100 jeon, the monetary subunit. The jeon is no longer used for everyday transactions and appears only in foreign exchange rates. The Bank of Korea, based in the capital city, issues Seoul the won. The Democratic People's Republic of Korea which is based in its capital city, Pyongyang, is divided into the same number of units, and is known as the North Korean won.
During the Colonial era, the won was replaced at par by the yen, made up of the Korean yen.
In 1945 after World War II, Korea became divided, resulting in two separate currencies, both called won, for the South and the North. Both the Southern won and the Northern won replaced the yen at par. The first South Korean won was subdivided into 100 jeon.
In 1946, the Bank of Joseon introduced 10 and 100 won notes. These were followed in 1949 by 5 and 1000 won notes. A new central bank, the Bank of Korea, was established on 12 June 1950 and assumed the duties of Bank of Joseon. Notes were introduced (some dated 1949) in denominations of 5, 10 and 50 jeon, 100 and 1000 won. 500 won notes were introduced in 1952. In 1953, a series of banknotes was issued which, although it gave the denominations in English in won, were, in fact, the first issues of the hwan. Until 1966, 10 and 50 hwan coins, revalued as 1 and 5 won, were the only coins in circulation. New coins, denominated in won, were introduced by the Bank of Korea on August 16, 1966, in denominations of 1, 5 and 10 won, with the 1 won struck in brass and the 5 and 10 won in bronze. These were the first South Korean coins to display the date in the Common Era, earlier coins having used the Korean calendar. The 10 and 50 hwan coins were demonetized on March 22, 1975.
In 1968, as the intrinsic value of the brass 1 won coin far surpassed its face value, new aluminum 1 won coins were issued to replace them. As an attempt to further reduce currency production costs, new 5 won and 10 won coins were issued in 1970, struck in brass. Cupro-nickel 100 won coins were also introduced that year, followed by Cupro-nickel 50 won in 1972. In 1962, the Bank of Korea introduced 10 and 50 jeon, 1, 5, 10, 50, 100 and 500 won notes. Thomas De La Rue printed the first issue of 1, 5, 10, 50, 100 and 500 won notes in the UK. The Korea Minting and Security Printing Corporation printed the jeon notes together with the second issue of 10 and 100 won notes domestically.
In 1965, 100 won notes (Series III) were printed using intaglio-printing techniques, for the first time on domestically printed notes, to reduce counterfeiting. Replacements for the British 500 won notes followed in 1966 also using intaglio printing, and for the 50 won notes in 1969 using lithe-printing. With the economic development from the 1960s the value of the 500 won notes became lower, resulting in greater use of cashier's checks with higher fixed denominations as means of payment, as well as increased use of counterfeited ones. In 1970, the 100 won notes were replaced by coins, with the same happening to the 50 won notes in 1972. Higher denomination notes of 5000 won and 10,000 won were introduced in 1972 and 1973 respectively. The notes incorporated new security features, including watermark, security thread and ultraviolet response fibers and were single printed. The release of 10,000 won notes was planned to be at the same time as the 5000 won notes but problems with the main theme delayed it by a year. Newly designed 500 won notes were also released in 1973 and the need for a medium denomination resulted in the introduction of 1000 won notes in 1975.
|Currency||South Korean Won (KRW)|
|GDP / GDP Rank||$1934.0 Billion USD|
|GDP Growth Rate||2.6 percent|
|GDP Per Captial||$37740.39 (PPP)|
UTC+9 (Korea Standard Time)
15.5% Korean Buddhism
President- Moon Jae-in
Prime Minister- Lee Nak-yeon
|Website||Go to the web|
|Public Debt||38.6 percent of GDP|
|Unemployment Rate||3.7 percent|
|Labor Force (Occupation)||-|