Bank of Korea hints at rate cuts to come

In its statement the Bank dropped the phrase ‘sufficient period of time’ in saying it will maintain a restrictive policy stance. Giving a clue that cuts are on the horizon. but not today.

• The South Korean economy has continued divergence between domestic demand and exports.
• Growth will be affected by the IT industry and recovery in consumption.
• The South Korean economy is expected to continue a moderate growth trend.
• South Korean inflation is likely to continue its slowing trend.
• The inflation path will be influenced by global oil prices, foreign exchange movements, and food prices.
• The Bank of Korea will examine the proper timing of rate cuts.
• It is essential to assess the impact of government measures concerning the housing market.
• The Bank of Korea will monitor household debt growth.
• The Bank of Korea will monitor Seoul housing prices.
• The Bank of Korea will thoroughly assess trade-offs among inflation, growth, and financial stability.
• Confidence is greater that inflation will converge on the target level.

Headlines via Reuters

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