KOSPI Breaks 4,720 for the First Time Ever… Won/Dollar Nears 1,480, Bank of Korea Likely to Keep Interest Rates Steady

Record-Breaking KOSPI Continues Its Rally

The KOSPI index surged past 4,720 for the first time in history, maintaining its upward momentum. The rally was driven by news of Hanwha’s spin-off of its tech and lifestyle divisions, along with strong performances from major auto and defense stocks.[1][4]

Large-cap stocks like Hyundai AutoEver, Hanwha Aerospace, Korea Aerospace, and Hyundai Construction led the gains. The department store, power equipment, and robotics sectors also showed solid growth.[2]

Won to Dollar Exchange Rate Approaching 1,480

The Korean won to US dollar exchange rate has been climbing for ten straight days since the start of the new year, nearing 1,480 won. If this trend continues, breaking through 1,500 won could happen sooner rather than later.[3][4]

Despite calls for interest rate hikes due to the high exchange rate, the Bank of Korea is expected to take a cautious approach, considering overall economic conditions. Companies are also issuing around $10 billion in foreign currency bonds to help stabilize the won.[3]

Bank of Korea Likely to Keep Base Rate at 2.5%

The Bank of Korea’s Monetary Policy Committee is scheduled to announce its interest rate decision today. Despite rising exchange rates and soaring Seoul apartment prices, the consensus points to holding the rate steady at 2.5% for now.[1]

Market attention is focused on the outlook for economic recovery outside of semiconductors and the messaging from the central bank’s monetary policy. The Korea Real Estate Board is expected to report continued increases in Seoul apartment prices for the 48th consecutive week.[1]

Key Sector Trends

• Department Stores: Expect sales growth driven by increased foreign visitors to Korea (Hyundai Department Store +5.5%, Shinsegae +4.3%)
• Power Equipment: Strong orders for AI infrastructure (LS Electric +8.6%, HyoSung Heavy Industries +4.6%)
• Robotics: NeuroMecha (+25.3%), Mobeas showing strength
• Hanwha Group: Spin-off announcement boosts Hanwha (+25.4%), Hanwha Life (+10.4%)

Export Trends and Changes in Bank Lending

Exports from January 1-10 totaled $15.6 billion, down 2.3% compared to last year, but daily average exports increased by 4.7%. Semiconductors grew by 40%, while passenger car exports declined by 25%.[3]

Bank household loans decreased by 2.2 trillion won over the past 11 months, marking the first decline in nearly three years. Mortgage loans over 400 million won now face penalties.[2]

Upcoming Economic Events Today

1. Bank of Korea Monetary Policy Committee Meeting (10:00 AM)
2. Korea Real Estate Board Weekly Apartment Price Report (2:00 PM)
3. US November Retail Sales & PPI Data (10:30 PM)
4. Federal Reserve Beige Book Release (4:00 AM)

Market optimism is growing, with some analysts predicting the KOSPI could reach 5,000 points soon. However, uncertainties around Trump’s trade policies and tariffs remain a key risk factor.[4]