Electrical meters function in a residential neighborhood in Seoul, Sept. 22. Newsis
A weak Korean gained is elevating issues about potential will increase in electrical energy, fuel and different utility costs, as state-run vitality corporations face rising overseas alternate losses, business officers stated Tuesday.
These corporations incur losses as a result of they buy vitality assets, comparable to crude oil, in U.S. {dollars} however promote domestically in gained, which means that continued depreciation of the gained towards the greenback additional amplifies losses.
Elevating utility costs to compensate is seen as a viable possibility.
The affected corporations embrace Korea Electrical Energy Corp. (KEPCO) and Korea Gasoline Corp. (KOGAS), whose annual overseas alternate losses are estimated at 200 billion gained ($136.2 million) and 20 billion gained, respectively, for each 10-won depreciation of the gained towards the U.S. greenback.
The native foreign money has persistently remained within the 1,400-won stage towards the U.S. greenback, which is taken into account a worrisome threshold however is more and more being seen because the “new regular.”
Based on the Financial institution of Korea, the common alternate fee for 2025 stood at 1,419.16 gained per greenback as of Monday, barely greater than it was through the 1997 Asian monetary disaster (round 1,395) or the 2008 world monetary disaster (roughly 1,276.4).
KEPCO and KOGAS stated they’re counting on stockpiled reserves, setting apart issues about potential utility worth will increase.
“Nevertheless, they can not maintain this technique for lengthy,” an business official stated, including that “the prices of imports underneath current long-term contracts, denominated in U.S. {dollars}, will naturally rise, probably resulting in higher monetary burdens.”
