The Korean economy is in a dilemma.

The Korean economy is in a dilemma.

Triple strength, in which the exchange rate rises, stock prices rise, and interest rates rise, is a very rare phenomenon. I wonder if this has happened before. In particular, the rise in the won-dollar exchange rate is too scary. The National Pension Service intervenes to protect the 1,400 won range, but there are concerns that the government’s artificial intervention in the market could have a greater adverse effect in the future.

The government pointed out Seohak ants as one of the causes. I wonder how much influence individual investors will have, but the actual overseas stock holdings of domestic investors amount to 150 trillion won. This is a huge figure considering that Korea’s annual budget is only 600 trillion won.

On top of that, foreign assets held by the National Pension Service amount to 800 trillion won. I wonder if domestic institutions and investors have ever had such strong demand for dollars.

On top of that, Samsung Electronics, Hynix, and Hyundai Motor Group, which are currently the top three exporters in Korea, are expected to have a record-high operating profit forecast for next year. Samsung Electronics estimates that it is around KRW 100 trillion, Hynix estimates around KRW 90 trillion, and Hyundai Motor Group estimates that it is around KRW 30 trillion.

The problem is that it is difficult for Trump to earn such huge profits and exchange them into Korean won. Trump is urging people to invest their money in North America. In this situation, companies are unable to exchange to won and continue to hold it in dollars.

The same applies to the yen. Japanese exporters are also making huge profits, but they have yet to convert them into yen. The recent trend is that the yen is weaker than the Korean won. The yen has continued to weaken despite Japan’s recent hike in key interest rates.

It seems to be a peculiar thing experienced by countries with a high proportion of U.S. exports. It is said that Korean companies have accumulated more than 170 trillion won in overseas subsidiaries, and Japanese companies have accumulated more than 400 trillion won in overseas subsidiaries. A huge amount of money came from the U.S. market, but it is not coming back because of Trump.

There is no immediate solution unless Trump is impeached. We need to find a solution within ourselves. Tax incentives should be greatly increased to allow investment to flow into the domestic stock market, and the physical strength and environment of the stock market should be dramatically improved in favor of investors. Separate taxation for dividends in the 10 percent range should also be considered temporarily.

The NPS should also play a leading role in reviving the domestic economy by boldly selling foreign assets that cannot afford to rise further and discovering and investing in blue-chip assets here. The new chairman has vowed to invest in domestic real estate, which is highly welcome.

Conversely, this is the best section to target foreign exchange gains. Of course, it is not easy to change the big trend, but if the exchange rate is left as it is, there may be an irreversible time. The time has come for the Lee Jae-myung government to make a decision again.