Low Interest Rates Shift Investment Strategies

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Low Interest Rates Shift Investment Strategies

As interest rates decrease, companies prefer domestic financing over attracting foreign investment.
They feel it is more beneficial to borrow money from domestic financial institutions.
Some companies repaid their foreign debts by borrowing from domestic sources.
Korea Gas Agency (KGA) recently abandoned its 300 million to 400 million-dollar plan to seek foreign financing to build a liquid natural gas base. It plans to raise the capital domestically.
KGA originally planned to invest 450 billion won and wanted to induce 430 billion won worth of foreign investment.
It had been negotiating with Shell, Mobil, and Total for this investment.
However, a contract had yet to be reached because of a difference in opinion. Recently, it abandoned its plan as interest rates fell to the level of 8 percent.




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