The Central Bank of Korea (BOK) serves as the central bank is responsible for ensuring the growth and stability of the Republic of Korea. In the years since the Asian market crisis, Korea has implemented strategies and initiatives to prevent a repeat of former economic and financial institutional difficulties.
The Ministry of Strategy and Finance, South Korea reported a government debt to GDP of nearly 36% in 2014. In order to revive the flagging economy, the Korean government has increased borrowing positions, with governmental debt reported at USD 483 trillion.
The S&P rating for the country is currently A+, while Moody’s currently rates the country Aa3. Fitch’s credit rating stands at AA- as of the reporting month February 2016.
Consumer prices climbed 0.8% year over year for the period ending January 2016, after rising 1.3% in December 2015, performing below expected rates. Inflation in South Korea is reported by Statistics Korea.
South Korea has experienced dramatic economic growth over the last five years, with GDP growth reported at 3.3% to $1,410 billion. The economy climbed 0.6% in the final quarter of 2015.
Government and Trade
Korea is largely an exports-oriented county, focused on technological exports such as consumer displays and televisions, memory, semiconductor technology, and maritime transport. While slowing of domestic demand could hamper the country’s progress in GDP growth, strong international demand has made South Korea a favourable stage for international business and investment, though competition from other bright spots in the Asian emerging markets should not be ignored.
South Korea was listed as one of Forbes Best Countries for Business in 2015.
- South Korea
- South Korean Won (KRW)
- Phonetic Spelling
The original "won" was a cognate of the Chinese Yuan and Japanese Yen, and is derived from the Hanja character (원), which itself is a cognate of the Chinese character for Yuan, translating to "round shape." The won was subdivided into 100 jeon, which means "money".
The won traces its history back to the colonial era. In 1633, the Korean Mun (currency at the time) consisted of copper and bronze coins, and acted as the principal currency of Korea. The Mun was used for over two centuries, until it was replaced in 1892 by the Yang. Then in 1902, the Won was introduced as the official currency of Korea, with an exchange rate of 1 Won to 5 Yang. The Bank of Korea was established in 1909, only to change its name to Bank of Joseon when Korea was annexed by Japan, in 1910. Under Japanese rule, Korea was forced to adopt the Korean Yen, replacing the Won at par.
Following World War II, in 1945, Korea became divided, resulting in two separate currencies, both called won, for both North and South Korea. The Won was originally pegged to the US Dollar at a rate of 15 Won to 1 Dollar, with the rate changing multiple times until 1951. Due to the drastic drop in value, the currency was yet again replaced. In 1953, the Korean Hwan was introduced and in 1962, a second Korean Won was established, replacing the Korean Hwan.
The most common denominations used today include:
Coins: ₩1, ₩5, ₩10, ₩50, ₩100, ₩500
Banknotes: ₩1000, ₩5000, ₩10000, ₩50000