Bank of Korea warns of worsening financial stability as exports fall

More rate cuts expected as South Korean exports fall for 10 consecutive months

The Bank of Korea

The Korean central bank has raised the alarm about escalating risks to the financial system from a rise in household and corporate debt, coupled with falling exports and protracted trade tensions.

The country’s benchmark financial stability index (FSI) rose to 8.3 at the end of August, surpassing 8.0 for the first time since early 2016, according to the latest report by the Bank of Korea (BoK). A higher figure indicates greater risks.

“The financial stability index has been on the rise since

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