Seoul city buses return to normal service from the first run today… first BOK rate-setting meeting of the year [Morning Briefing]

◆Seoul city bus strike ends after two days as wage talks reach agreement

Wage and collective bargaining negotiations between labor and management for Seoul city buses have been concluded, and services resumed normal operations starting with the first bus at 4 a.m. today, the 15th. The Seoul City Bus Labor Union and the Seoul City Bus Transport Business Association, representing management, agreed to raise 2025 wages by 2.9%, below the 3% demanded by the union. The retirement age will be extended from the current 63 to 64 starting in July this year, and further raised to 65 starting in July 2027, reflecting the union’s request for an extension to 65 in a phased manner. Regarding Seoul City’s operational inspection system, which the union had demanded be abolished, the parties agreed to form a labor-management-government TF team to discuss the matter. With the agreement reached, the Seoul Metropolitan Government lifted its emergency transport measures and normalized all public transportation operations.

◆First rate-setting meeting of the year… hold seen as likely

The Bank of Korea’s Monetary Policy Board will decide today, the 15th, at its first monetary policy meeting of the year whether to adjust the base rate, currently at 2.5% per year. Many economists are forecasting a fifth consecutive hold following July, August, October, and November of last year. A common view is that, with the won-dollar exchange rate unstable, the BOK has little reason to cut rates in a way that would encourage further depreciation of the won. In principle, for the won—which is not a reserve currency like the dollar—if the base rate falls well below that of the US (3.50–3.75%), the risk increases that foreign investment funds will flow out in search of higher yields, weakening the won. On the 14th, in the Seoul foreign exchange market, the won-dollar rate in daytime trading closed (as of 3:30 p.m.) at 1,477.5 won, up 3.8 won from the previous day.

◆Wall Street ends lower on concerns over possible US military involvement in Iran

The three major US stock indexes closed lower. Some US banks’ results fell short of expectations, and anxiety that the US could become militarily involved in Iran triggered a sell-off. However, late in the session, US President Donald Trump suggested the US might not strike Iran, prompting oil prices to turn lower and the indexes to quickly pare losses. Near the close on the 14th (US Eastern time) at the New York Stock Exchange, the Dow Jones Industrial Average fell 0.09% from the previous session. The Standard & Poor’s (S&P) 500 declined 0.53%, and the Nasdaq Composite slid 1% to end the day.

◆Police raid Rep. Kim Byung-gi… unable to find a safe; iPhone locked

The Seoul Metropolitan Police Agency’s Public Crime Investigation Unit conducted search-and-seizure operations at six locations, including the home, constituency office, and National Assembly Members’ Office Building office of Democratic Party lawmaker Kim Byung-gi, who is suspected of receiving “nomination donations,” as well as the home of Lee Ji-hee, vice chair of the Dongjak District Council, known as a close associate of Kim. Some have criticized the raids as belated, noting that considerable time has passed since the allegations surfaced. Police secured a statement from a former aide that a private safe containing valuables belonging to Kim and his spouse was at the second son’s home, and investigators were also dispatched to the second son’s apartment in Daebang-dong. No safe was found at the second son’s home or at the other five locations, according to reports. Police believe the safe may have been moved elsewhere before the raids. Kim submitted an iPhone during the search, but the phone was reportedly locked. Police are expected to summon Kim for a full investigation once analysis of the seized materials is completed. Other allegations involving Kim include interference in his second son’s transfer admission to Soongsil University, misuse of district council work-related expenses for private purposes and a cover-up of an investigation involving his spouse, receiving Korean Air hotel vouchers and making protocol-related demands, an expensive meal with Coupang’s CEO, interference in his eldest son’s hiring at the National Intelligence Service, mobilizing aides for his eldest son’s NIS work, and preferential treatment for medical care at a hospital in his constituency.

◆Iran points to Trump and Netanyahu as behind protests

The Islamic Revolutionary Guard Corps (IRGC), which defends Iran’s Islamic theocratic system, warned by naming the US and Israeli leadership as being behind recent protests over economic hardship in the country. On the 14th local time, IRGC Commander-in-Chief Mohammad Pakpour, referring to US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu, called them “killers of Iranian youth and the guardians of national security,” adding, “We will thwart the conspiracies of the White House and the rulers of Tel Aviv aimed at targeting a strong Iran.” The remarks came amid speculation that the US and Israel could seek to topple Iran’s system of theocratic rule using the protests as a pretext. Trump, in a CBS interview the previous day, said of reports that Iranian authorities would hang protest participants, “If they do that, we will take very strong action,” repeatedly suggesting the possibility of military involvement. In response, Ali Shamkhani, a political adviser to Iran’s Supreme Leader Ayatollah Seyyed Ali Khamenei, told Trump to “mention the fact that Iranian missiles swept through Al Udeid base.” Al Udeid Air Base in Qatar is the largest base the US operates in the Middle East; during the “12-day war” in June when Israel and Iran exchanged missile strikes, Iran retaliated by striking Al Udeid after the US joined in by bombing Iranian nuclear facilities. Reuters reported that day that the US advised some personnel stationed at Al Udeid to withdraw.

Choi Soo-jin, Hankyung.com reporter naive@hankyung.com