BOK plans to expand the cap on temporary special loans for small and medium businesses

More from the Bank of Korea after the surprise rate decision earlier:

Bank of Korea leaves rate unchanged at 3% vs. cut to 2.75% expected

• BOK plans to expand the cap on temporary special loans for small and medium businesses to 14 trillion won.BOK will determine the timing and pace of further base rate cuts to mitigate downside risks to economic growth.BOK reports that South Korea’s consumption has weakened and construction investment remains sluggish.BOK intends to closely monitor the domestic political situation.BOK anticipates that economic growth will slow.BOK aims to closely watch changes in economic policies both domestically and internationally.BOK is monitoring inflation, household debt, and the exchange rate.BOK suggests GDP could fall below earlier forecasts.BOK stresses the importance of remaining cautious about foreign exchange volatility.BOK notes that the domestic political situation and fiscal policies will affect the growth path.BOK states that weakening of the won could add to price pressure.BOK observes that downside risks to economic growth have intensified due to escalating political risks.BOK expects inflation to remain stable.BOK points out that the Korean won-to-U.S. dollar exchange rate has risen considerably.BOK believes the recovery in consumption will be slower than previously expected.

Still to come:

• Bank of Korea Governor Rhee Chang-yong set to explain the surprise interest rate decision

This article was written by Eamonn Sheridan at www.forexlive.com.