South Korea's economy in crisis including WTI

-South Korea's economy in crisis including WTI surge, sharp drop in foreign exchange reserves and currency surge-

WTI (West Texas Intermediate) was "USD 73.25" per barrel on June 4, 2024 (Reuters) - WTI (West Texas Intermediate) was "USD 83.21" per barrel as of July 3, 2024 (Reuters) - and WTI (West Texas Intermediate) has been surging almost "USD 10" per barrel for nearly a month.

However, not only WTI but also wholesale and retail prices such as Gasoline are soaring (see Bloomberg attachment).

However, this phenomenon is almost unusual.

So why is WTI soaring so much?

It is because of the lack of stock in the API.

So Brent crude is also surging to "USD86.64" per barrel and is running around "USD90.00."

For reference, "API" means the American Petroleum Institute, or the American Petroleum Association, which analyzes and discloses statistics that report the production, import and inventory of major distilled petroleum products such as crude oil, gasoline, and kerosene in the United States.

On top of that, the Bank of Korea today disclosed its foreign exchange reserves for June 2024.

The country's foreign exchange reserves stood at $412.21 billion as of the end of June, down $620 million from the end of May, according to the Bank of Korea's "Foreign Exchange Reserves at the end of June 2024."

Then, South Korea's foreign exchange reserves stood at $4132.6 billion at the end of April 2024, down $5.99 billion (about 8.14 trillion won) from the end of March 2024.

In addition, the Bank of Korea's foreign exchange reserves stood at $412.83 billion at the end of May 2024, down $430 million from $4132.6 billion at the end of April.

Thus, the Bank of Korea's foreign exchange reserves have been declining in April, May, and June 2024, or the past three months in a row, with a total of $7.04 billion (W9.8 trillion) down, including $5.99 billion (W5.9 billion) in April, $430 million (W4.3 billion) in May, and $620 million (W6.8 trillion) in June.

The Bank of Korea explains that the reason for the decrease in foreign exchange reserves is the temporary effect of repayment of the maturity of foreign currency bonds and foreign exchange swaps with the National Pension Service, and the decrease in the conversion of foreign currency assets in other currencies due to the strengthening of the U.S. dollar, but I believe the failure to operate the "Asset Portfolio" of the Bank of Korea's foreign exchange reserves is the cause.

In other words, securities account for "88.3%" of the Bank of Korea's foreign exchange reserves, so there is no dollar cash.

In other words, the biggest problem with the Bank of Korea's foreign exchange reserves is that there is no dollar cash available in an emergency.

In addition, the won's exchange rate against the U.S. dollar stood at "1,389.50 won" as of this time, and the exchange rate is also soaring.

In other words, energy prices such as WTI are soaring like this, but there are no dollars to use, and the exchange rate is soaring.

If this happens, the won's value will fall further along with the strong dollar phenomenon, the exchange rate will inevitably soar, the import price index will soar, and the PPI (Producer Price Index) and CPI (Consumer Price Index) will also soar, so inflation cannot be caught.

High prices, high interest rates, high exchange rates, depreciation of won, where is the Korean economy going?

Can't you fix it???