BoK expected to remain on hold – UOB

Economist Ho Woei Chen, CFA, at UOB Group, suggested the BoK could refrain from acting on rates at the next meeting.

Key Quotes

“The Bank of Korea (BOK) cut its benchmark interest rate by 25 bps to 1.25% earlier this month, matching its previous record low”.

“After two cuts this year, we expect the central bank to be on hold at its last meeting this year on 29 Nov. Although the central bank has room for further rate cuts due to low domestic inflation (real interest rate is much higher at around 1.7% compared to previous time when the benchmark rate was at record low), it has cited concerns about the effective lower bound on interest rates”.

“While the BOK is not expected to cut again soon, the Nov monetary policy meeting will be important as the central bank provides an update to its 2019 economic forecasts as well as new 2020 projections”.