South Korea

연말 '달러 폭탄'…12월 외환보유액, IMF 이후 최대폭 감소[한경 외환시장 워치]

Hankyung | Local Language | News | Jan. 7, 2026 | UndeterminedFinancial System Problems

South Korea's foreign exchange reserves declined by $2.6 billion to $428.05 billion in December 2025, marking the largest December drop since the 1997 IMF foreign exchange crisis. This decrease is notable as December usually sees an inflow of dollars due to financial institutions building up foreign currency deposits to meet BIS capital ratio requirements.

The significant reserve reduction is attributed to foreign exchange authorities’ active market intervention starting December 24, which included verbal warnings and currency hedging through foreign exchange swaps with the National Pension Service. This intervention lowered the exchange rate by about 45 won, from 1,484 to 1,439 won, but came at the cost of reducing reserves.

By asset category, securities holdings fell by $8.22 billion, likely from sales of government and corporate bonds to raise dollars, while deposits increased by $5.44 billion due to financial institutions' foreign currency deposit payments. Despite a weakening dollar that could have increased the value of reserves denominated in other currencies, heavy intervention diminished overall reserves.

The Bank of Korea anticipates some reserve recovery in January 2026, driven by the introduction of a foreign currency reserve remuneration system that pays interest on excess deposits and potentially less intense intervention. However, if financial institutions withdraw deposits used to meet regulatory requirements at the quarter-end, reserves could again decline, as seen with a $4.6 billion drop in January 2025.

지평, ‘2025 건설준법대상’에서 ‘건설법무’, ‘신탁’ 2개 부문 최우수상 수상

Jipyong LLC | Local Language | AcademicThink | Jan. 7, 2026 | UndeterminedLegal Exposure

Jipyung won the top awards in the “Construction Legal Affairs” and “Trust” categories at the 2025 Construction Compliance Awards held on December 18 in Seoul. The awards, hosted by Daehan Economy and the Association of Legal Officers of First-Tier General Construction Companies, assess law firms based on performance capabilities and client satisfaction through document review and surveys.

In the Construction Legal Affairs category, Jipyung earned recognition for its advisory work with KB Asset Management on the KRW 900 billion sale of Seoul International Tower in Yeoksam-dong. The firm was praised for its structured transaction advice and effective stakeholder coordination and risk diagnosis throughout the sale process.

For the Trust category, Jipyung advised KB Real Estate Trust on the sale of Gangnam N Tower under a share deal and capital reorganization structure. The firm’s strengths included practical issue analysis, response, and preemptive structural risk evaluation, which secured them the top prize in this category.

Attorney Lee Seung-hwan, who led both cases, received the awards on behalf of Jipyung. The firm’s Construction & Real Estate Group and REITs & Fund Group, with about 70 lawyers and specialists, offer comprehensive advisory and litigation services, leveraging their extensive experience in construction and real estate law. Jipyung plans to continue providing systematic legal advice based on this expertise.

Yonhap | English | News | Jan. 7, 2026 | North Korea

South Korean President Lee Jae Myung and Chinese President Xi Jinping met on January 5, 2026, sharing the view on the importance of resuming dialogue with North Korea and agreeing to explore measures for peace on the Korean Peninsula. During the 90-minute summit, they reaffirmed that peace and stability in the region serve both countries' interests, and China expressed willingness to play a constructive role in the peace process. The leaders also agreed to hold annual meetings and expand communication among defense authorities to build mutual trust and contribute to regional stability.

The summit focused on practical cooperation, avoiding direct mention of North Korea's denuclearization. Lee emphasized exploring viable alternatives for peace as a foundation for prosperity and growth. Discussions also addressed concerns over China's steel structures in the jointly managed Provisional Maritime Zone in the Yellow Sea, agreeing to continue consultations and hold vice-ministerial talks within the year. Both sides stressed the importance of the Yellow Sea as a peaceful and co-prosperous area.

Cultural exchanges were also on the agenda, with agreements to gradually expand cooperation in areas such as Go, soccer, dramas, and films, aiming to alleviate negative sentiments between the two countries. Lee reaffirmed South Korea's respect for the "One China" policy in response to China's queries about Taiwan and underscored mutual respect for stable bilateral relations.

Lee's first visit to China aimed to restore and improve South Korea-China relations, strained under the previous administration due to a closer US alliance. Both leaders acknowledged their countries' long-standing historical ties and expressed a desire to open a new phase of partnership. Xi highlighted the importance of cooperation amid geopolitical changes, opposing protectionism, and promoting multilateralism, with the two leaders emphasizing frequent communication and visits.

Following their talks, Lee and Xi signed 14 memorandums of understanding covering trade, technology, environment, and other fields. They also agreed on returning Qing Dynasty stone lion statues to China, underscoring the deepening bilateral cooperation.