IMF Cuts Korea's Benchmark Current Account Surplus to 3.3% of GDP - Seoul Economic Daily

The International Monetary Fund has revised its assessment model and lowered its benchmark for Korea's appropriate current account surplus to 3.3% of GDP in 2025 from 4.7% in 2024, according to the report. The Bank of Korea argues the model does not reflect a distinctly Korean trait: households headed by someone aged 65 or older save at a higher rate than households overall. Even so, analysts note that major trading partners could read Korea's surplus as an unfair competitive advantage and use it to press for a stronger won. The Bank of Korea reported an August current account surplus of $46.11 billion, the second-largest monthly figure on record, with a January-August cumulative surplus of $279.2 billion.

In trade policy, the U.S. Federal Communications Commission on July 28 added foreign-made humanoid, quadruped and autonomous mobile robots to its covered list, blocking certification of new models. To qualify, a robot must be produced in the United States with U.S.-made components exceeding 65% of total component costs, rising to 75% from 2029. Rainbow Robotics (277810), a Samsung Electronics (005930) subsidiary, filed for conditional approval late last month, the first Korean company to do so. About 20 Korean companies plan to export to the U.S. by 2027, and Korean robot exports to the U.S. reached 493.9 billion won in 2024, up 83% from 2021. Startups dependent on Korean- or Chinese-made core components such as actuators say the threshold is difficult to meet.

Market conditions were weak. The KOSPI closed at 6,384.24 on the 12th, down 3.65%, and the KOSDAQ fell 4.83%. Foreign investors sold a net 2.0115 trillion won on the main board that day. Although Samsung Electronics reported record third-quarter operating profit of 107 trillion won, attention has shifted to next year's growth, and the end of SK hynix's share buyback, nearing completion, has raised concerns about thinning support.

Elsewhere, France's 10-year government bond yield approached 5% before settling near 4.8%, its highest in 25 years, with the spread over German bunds at its widest since 2012. Italian and Greek 10-year spreads over bunds have risen to about 120 and 100 basis points, respectively. On the ADR front, SK hynix's 90-day lockup on its American depositary receipts expired on the 7th, and chairman Chey Tae-won has said additional issuance is possible if investor returns remain solid; the ADRs traded at a 40.42% premium to Korean common shares.