Oil prices, exchange rates and interest rates 3highs increase pressure on corporate profits and costs
As rising oil prices and exchange rates coincide with high U.S. interest rates, a domestic ‘3high’ phenomenon is emerging. Companies are voicing simultaneous concerns about energy and raw-material costs and interest expenses, while concerns have been raised that performance gaps between industries could widen.
With oil prices and exchange rates rising while U.S. interest rates remain high, a domestic ‘oil prices, exchange rates and interest rates’ 3high phenomenon is being observed. Reports say high oil prices are pushing up global prices. Concerns have been raised that high U.S. interest rates are putting pressure on South Korea’s interest-rate decisions.
Companies are voicing concerns about the cost of energy and imported raw materials. Raw-material and logistics costs are reportedly driving up expenses for manufacturers and small and medium-sized enterprises. The account also says this is weakening profitability at some companies.
Upward pressure on interest rates was cited as a factor increasing companies’ interest expenses. Reports say that companies with more borrowing could face greater financial strain. The account says both the financial sector and companies are closely monitoring interest-rate fluctuations.
The article said these factors could deepen polarization across industries. It reported that sectors with high import dependence face relatively greater cost pressures, while some export industries benefit from currency movements. Market participants and industry representatives said the effects vary from company to company.
The government and companies are monitoring movements in exchange rates, oil prices and interest rates. Companies are reportedly reviewing their cost management and foreign-exchange hedging plans. The report added that investors and creditors are also checking relevant indicators.
Overall, the article summarized that the simultaneous rise in oil prices, exchange rates and interest rates is directly affecting companies’ cost structures and profits. It reported that, with the possibility of this trend continuing for some time in mind, companies’ quarterly results and disclosures need to be reviewed. The article repeatedly mentioned concerns about polarization.
Sources: 연합뉴스 경제
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