International
South Korea: Presidential office expresses disappointment over BOK's rate freeze
Seoul, Aug 22 (IANS) The Presidential office expressed disappointment over the Bank of Korea’s decision to freeze the key rate at 3.5 per cent on Thursday, citing concerns over its impact on domestic consumption.
“The interest rate decision lies within the authority of the Monetary Policy Board, but it is disappointing from the perspective of boosting domestic command,” a senior presidential official said in a remark on the rate decision, Yonhap news agency reported.
The official said the government will announce measures next week to address domestic demand, including ensuring the supply of essential goods for the Chuseok holiday.
The BOK has kept the policy rate unchanged since February last year but signalled a policy pivot this year amid moderating inflation and a slower-than-expected economic outlook.
South Korea’s central bank froze its key rate for the 13th straight session on Thursday due to soaring home prices but may start a policy pivot this year amid moderating inflation and a slower-than-expected economic outlook.
The BOK has continued to stand pat following rate freezes since February last year after delivering seven consecutive rate hikes from April 2022 to January 2023.
The central bank said inflation has continued its downward trend and the recovery in domestic demand has been modest.
But it still needs to further monitor how recent measures over the housing market are affecting home prices in Seoul and its surrounding areas and household debt, the BOK said in a statement.
“The board sees that it is appropriate to maintain its current restrictive policy stance,” it said, adding that it will also examine the proper timing of rate cuts.
The rate freeze came as household debt runs high in the face of a series of lending rate hikes and with tighter lending rules and inflationary pressure in Asia’s fourth-largest economy showing signs of easing.
BOK Governor Rhee Chang-yon said rising household debts and home prices should be dealt with immediately to ensure financial stability.
“Household debt should be considered for financial stability, and most board members see the need to curb rising real estate prices,” Rhee said in a press conference.
The BOK chief said four board members opened the door to a potential rate cut within three months, more than the two members in July.
“Board members shared the view that any potential rate cut would come after government measures to rein in home prices work out,” Rhee said.
Earlier, the central bank said conditions are ripening for a policy pivot, although it remains vigilant against soaring household loans.
The country’s top five lenders had already extended 4.18 trillion won ($3.12 billion) in household loans, mostly home-backed loans, in the first 14 days of this month, already higher than the previous month’s 5.5 trillion won rise.
In the second quarter of the year, outstanding household credit reached a record 1,896.2 trillion won, up 13.8 trillion won from three months earlier, rebounding from the previous quarter’s 3.1 trillion won fall, according to the central bank data.
“It is essential to assess the impact of government measures concerning the housing market and the increased market volatility because housing prices in the Seoul area continue to rise, and household debt persists in its increase,” the central bank added.
South Korea’s inflation picked up pace in July on high prices of fruits and petroleum products, though it stayed below 3 per cent for the fourth consecutive month.
Consumer prices, a key gauge of inflation, rose 2.6 per cent on-year last month, compared with a 2.4 per cent increase a month earlier, marking the first time in six months that the price growth accelerated.
“Looking ahead, inflation is expected to continue its slowing trend, owing to the base effect from the sharp rises in global oil and agricultural product prices last year and due to modest demand pressure,” the bank said.
The rate freeze also came as the central bank trimmed its growth projection for the year to 2.4 from its outlook of a 2.5 per cent expansion estimate in May.
In May, the central bank jacked up its growth estimate to 2.5 per cent for the year, up from its earlier projection of 2.1 per cent, but slashed the 2025 growth outlook to 2.1 from 2.3 per cent.
The country’s exports are projected to increase 6.9 per cent this year, higher than its earlier estimate of 5.1 per cent, and private spending is likely to gain 1.4 per cent this year, slowing from its earlier projection of a 1.8 per cent advance.
Construction investment is forecast to contract 0.8 per cent this year, compared with an earlier estimate of a 2 per cent dip.
The country’s current account surplus is expected to increase to $73 billion from an earlier estimate of $60 billion, according to the central bank.
The bank cut its inflation outlook to 2.5 per cent for the year, from its earlier estimate of 2.6 per cent.
Last year, the economy expanded 1.4 per cent, slowing from the previous year’s 2.6 per cent gain and the 4.1 per cent advance in 2021.
The central bank’s rate freeze followed the Federal Reserve’s decision early this month to hold its benchmark lending rate steady at between 5.25 per cent and 5.50 per cent for the eighth consecutive time.
Its chair said a rate cut could be “on the table” as soon as September if conditions are met.
–IANS
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Vientiane (Laos), Aug 22 (IANS) Representatives from the Lao government and development partners have attended a conference here titled “Climate Change and Nutrition in Laos: Intersections and Interventions” to discuss the impact of climate change on nutrition in the Southeast Asia country and potential solutions.
Speaking at the conference, deputy director general of the Department of Hygiene and Health Promotion under the Lao Ministry of Health Viengkhan Phixay, said, “We gather to address a critical and interwoven issue: the impact of climate change on nutrition and how we can work together to tackle these challenges,” Xinhua news agency reported.
The Lao government is actively engaged in this endeavor, with numerous policies and initiatives aimed at addressing both climate change and nutrition, Lao National Television reported on Thursday.
“By leveraging the Scaling Up Nutrition network in Laos, which is led by the government, and supported by civil society, donors, and the United Nations, we have a robust platform to tackle the negative impacts of climate change while improving nutrition and overall health for everyone in Laos,” Viengkham said at the conference held on Monday.
The conference featured a series of presentations that not only detailed evidence-based research but also introduced innovative tools for measuring and enhancing nutrition under the impact of climate change.
The conference stressed the critical need for integrated approaches to tackle the intertwined challenges of climate change and nutrition, and setting the stage for impactful future collaborations.
–IANS
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Baghdad, Aug 22 (IANS) A civilian was killed while seven others were injured on Thursday in a tribal shootout in Iraq’s holy Shiite province of Najaf, according to a local security source.
The shootout erupted in the early hours between armed men from the local tribe in the al-Zarga area in northern Najaf, some 160 km south of Baghdad, a local police officer told Xinhua on condition of anonymity.
The clash resulted in the killing of an Iraqi civilian and the injury of seven others, including three Iranian Shiite pilgrims, the source added.
A joint force from the Interior Ministry’s emergency response division and Najaf provincial police arrested 53 gunmen from both sides of the shootout and seized weapons and ammunition, the Interior Ministry said in a statement.
It added that search operations are ongoing to locate additional gunmen and weapons, with more details to be released later.
The incident took place as numerous pilgrims traveled to the city of Karbala to observe Arbaeen, which marks the end of a 40-day mourning period for the killing of Imam Hussein, the grandson of Prophet Muhammad, in the Battle of Karbala in 680 A.D.
Typically, these pilgrims also visit Najaf as part of their journey to Karbala.
–IANS
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Dhaka, Aug 22 (IANS) Bangladesh’s interim government has sought $1 billion from the World Bank as budgetary support.
The call came from the country’s Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan’s meeting with Abdoulaye Seck, the World Bank’s Country Director for Bangladesh and Bhutan, in Dhaka on Wednesday.
He made the plea as the ministry owes more than 2 billion dollars to suppliers in import costs of power and energy, Xinhua news agency reported.
Khan mentioned that the interim government, which was formed with many pressing mandates, is due to settle a $2 billion debt left by the previous government in the power sector.
He said they have already suspended activities under the much-criticized Quick Enhancement of Electricity and Energy Supply Act 2010 and abolished the government’s power to set energy prices without any public hearing.
On August 5, the former Prime Minister of Bangladesh, Sheikh Hasina, was ousted from her country and power, ending her rule since January 2009.
This event was seen as a massive escalation, with what initially started as student’s protests and resulted in a major crisis in Bangladesh.
Earlier on August 8, Nobel laureate Muhammad Yunus took oath as the head of Bangladesh’s interim government.
–IANS
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Belgrade, Aug 22 (IANS) Serbian police are still searching for seven missing migrants in the Drina River after their boat capsized when crossing from Serbia to Bosnia and Herzegovina, Serbia’s Interior Ministry confirmed in a press release issued on Thursday.
According to testimonies of the migrants who managed to reach the shore, there were approximately 25 people on board. So far, police and rescue teams have found 18 individuals, including three children, on the riverbank, Xinhua news agency reported.
Serbian Deputy Prime Minister and Minister of the Interior Ivica Dacic said police and the Emergency Situations Sector responded promptly after being alerted by the Bosnian border authorities early Thursday morning.
An intensive search is underway in the Drina River and its surrounding area.
The European Border and Coast Guard Agency, Frontex, reported a significant decrease in illegal border crossings in the Western Balkans during the first half of 2024.
The illegal crossings towards EU borders reached 12,407 between January and July 2024, a 75 per cent drop compared to the same period last year.
–IANS
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Islamabad, Aug 22 (IANS) Islamabad, the capital of Pakistan, turned into a fortress on Thursday with dozens of containers forcing closure of several roads with heavy deployment of law enforcement forces following the cancellation of a No-Objection Certificate (NOC) of an anti-government protest planned by Pakistan Tehreek-e-Insaf (PTI) and protest call by religious parties, including the Jamaat-e-Islami (JI), Jamiat Ulema-e-Islam (JUI) under the banner of Majlis-e-Tahaffuz-e-Khatme Nabuwwat against a Supreme Court decision in the Mubarak Sani case.
Anticipating widespread protests, the local administration, which had cancelled the NOC, imposed Section 144 in the city, barring assembly of people and also closed all educational institutions for the day.
Later in the day, the PTI announced its decision to postpone its protest rally and rescheduled it for September 8.
The government maintained that it did not want to take any chance considering the Supreme Court hearing and also the presence of Bangladeshi cricket team in the country which is currently touring Pakistan for a Test series.
On Wednesday, the capital administration of Islamabad decided to cancel the NOC for PTI, less than 24 hours before the scheduled public gathering in Tarnol area. PTI had earlier announced that it would go ahead with its planned gathering even after its NOC was revoked.
“It is concerning that the government might try to exploit the rally to incite unrest and blame it on PTI. They are scared and are trying to find ways to orchestrate cases against us,” said senior PTI leader Azam Swati.
Imran Khan’s party has been struggling to hold a political gathering in the capital for the past five months with the local administration delaying grant of any permission to hold such an event. Even after a permission is granted, it ends up being revoked a few hours later.
The latest episode is the second time the capital administration has cancelled the NOC issued to PTI for holding a political gathering at Tarnol.
The government maintains that it had detailed meeting with the Inspector General Police, Deputy Commissioner, senior officers from the Chief Commissioner’s office, officials of the Inter-Services Intelligence (ISI), Military Intelligence (MI) and Intelligence Bureau (IB) after which it was decided that there will be serious law and order concerns if the gathering is allowed.
On the other hand, several religious parties have also taken to the streets in Islamabad, protesting against the Supreme Court of Pakistan’s verdict in the Mubarak Sani case.
Tehreek-e-Khatam-e-Nabuwat, an umbrella name for different religious parties, has called for a protest in front of the Supreme Court after the July 24 Supreme Court verdict in the case, maintaining and ruling that while Ahmadis are declared non-Muslims, they retain the right to profess and proliferate their religion, provided they do not publicly use Muslim terms or introduce themselves as Muslims.
In February 2024, Mubarak Ahmed Sani, an Ahmadi, was accused of violating the Punjab Holy Quran (Printing and Recording) Amendment) Act 2021 by distributing the proscribed book ‘Tafseer-e-Sagheer’. However, the Supreme Court maintained that the alleged act occurred in 2019, before it was criminalised in 2021.
The Supreme Court decision was widely criticized by the religious groups who demanded the federal and the Punjab government to challenge the decision and ensure punishment for Sani.
The Punjab government later filed a review petition in the Supreme Court while a petition was also filed by the Federal government on directions of the Prime Minister Shehbaz Sharif.
–IANS
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