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Korea's commercial banks are experiencing a shift in market confidence in time with the coming of spring. Many more domestic banks are raking in foreign currency by borrowing money from overseas and through bond sales, which have been active in recent months. The amount is astronomical, with industry watchers estimate more than US$2 billion is expected to come in from overseas throughout this and next month.
Hanabank has completed sales of government-guaranteed global bonds worth around $1 billion. Wooribank has also borrowed $300 million. The Industrial Bank of Korea plans to sell overseas bonds of almost $1 billion, while the Export-Import Bank of Korea is selling $3 billion worth of bonds abroad.
Experts say foreign investors are becoming more confident about Korea's financial market, which means they are giving higher marks when it comes to the fundamentals of Korea's overall economy. But many warn that the recent trend could be a short-term effect and that banks are knowingly taking advantage of it.
This is not altogether a far-fetched analysis given that a number of credit rating agencies are downgrading nations previously known for their sound economies. One leading French agency has kept Korea's ratings at A2, which is the second highest, but says it plans to downgrade its forecast. Countries in the same category are the United States, Taiwan, Hong Kong and Malaysia.
Arirang News
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