Ed Smith is a quest author. He can be reached at Simon@eleven-tenths.com. -- Ed.
In many ways, South Asia nations such as South Korea are now synonymous with the forex market, with the region as a whole now accounting for nearly 20% of total trading volumes
It is also inarguable that the foreign exchange has continually helped to shape business in South Korea over the course of the last two decades, with the region’s mixed economy largely export-based and capable of driving huge capital inflows from overseas.
We’ll explore this further in the post below, while asking how the forex market can help to drive business growth in South Korea.
1. Creating Passive Income and Diversified Revenue Streams
In the modern age, businesses tend to live by the mantra which states that “you have to speculate to accumulate.”
This is particularly true in regions such as South Korea, which are hotbeds of economic opportunity and increasingly synonymous with financial market and currency trading.
To this end, South Korean firms can look to create passive and additional income streams by investing in a diverse portfolio of relevant assets, starting with currency and moving into Asian stocks and viable commodities.
This can help firms to both boost their revenue-earning potential through increased yields and preserve capital, which are core goals of businesses in any marketplace.
2. Boosting Exports (at Least in the Current Climate)
Of course, the value of a nation’s currency is also dependent on a number of macroeconomic factors, with the base interest rate arguably one of the most influential.
This has been particularly apparent during the Covid-19 outbreak, with South Korea’s total stimulus package for dealing with the crisis having now reached the 270 trillion won mark ($221.8 billion).
This includes slashing base interest rates and causing a temporary decline in capital inflows, as the value of the won depreciates and becomes less appealing to certain types of investment.
However, this also lowers the cost of exports and makes them more accessible, and this has provided a much-needed boost to a raft of businesses in the region.
This has helped to ease the recent decline in daily shipments and international exports, which plunged by 20 percent in May only to rebound and record a 16 percent drop during the following month.
3. Increased Competition in the Forex Market
On a fundamental level, we’ve also seen the foreign exchange become increasingly competitive in recent times.
This rule extends beyond the introduction of more progressive regulatory measures too, with the available range of exchange and remittance operations for forex brokerages and credit card companies across the globe.
This move has been designed to boost competition in the market and attract new businesses and entrepreneurs into the space, making the niche far more accessible and profitable to operators.