Seoul, May 28 (IANS) Business sentiment among South Korean companies continued to worsen as the weak yen trend boosted concerns over corporate profitability, a survey by the nation’s business lobby showed Tuesday.
Business survey index (BSI) for June, a gauge of business environment outlook for the upcoming month, declined 2.6 points from a month earlier to 97.2, according to the survey of the country’s 600 largest corporations by sales taken by the Federation of Korean Industries (FKI).
The figure shrank for three straight months, and it stayed below the benchmark 100 for two months in a row. A reading below 100 means pessimists outnumbering optimists, reported Xinhua.
The negative outcome stemmed mainly from concerns over the worsening of profitability amid the weak yen trend that offset positive effects from the extra budget plan and the policy rate cut, the business lobby said.
Bank of Korea (BOK) cut its benchmark interest rate by 25 basis points to 2.5 percent at the May monetary policy meeting, and the finance ministry unveiled the supplementary budget plan worth 17.3 trillion won ($15 billion) in mid-April that was passed through parliament earlier this month.
Those stimulus policies were offset by the devaluation of the Japanese yen against the dollar that was feared to have a negative impact on the South Korean exports, which account for around half of the economy, from the second quarter of this year.
The yen/dollar exchange rate rose fast since last September, topping the 100 yen level in around four years earlier this month. More than 20 percent depreciation of the Japanese yen versus the dollar over the cited period was faster than any other descending period.