SOUTH Korea‘s central bank left interest rates at a 15-year high on Thursday amid signs that the weaker economy is slowing inflation, with investors zeroing in on Governor Rhee Chang Yong’s feedback on the timing of a coverage pivot later this 12 months.
The Bank of Korea (BOK) held its key coverage charge at 3.50 per cent at a coverage assessment in Seoul, retaining it unchanged for a ninth straight assembly as anticipated by all 38 analysts polled by Reuters.
The BOK saved its financial progress forecast for this 12 months unchanged at 2.1 per cent and inflation at 2.6 per cent, it mentioned together with the speed announcement.
South Korea‘s 300 basis points of interest rate hikes have stalled economic growth in Asia’s fourth-largest financial system as development funding took successful from larger borrowing prices whilst exports continued to enhance.
In a post-policy information convention, Governor Rhee is anticipated to affix international friends such because the Federal Reserve and the Reserve Bank of Australia in pushing again in opposition to any bets on a near-term easing as inflation, whereas cooling, continues to be above the central financial institution’s goal of two per cent.
In January, Rhee warned markets in opposition to rallying on untimely expectations for a charge reduce and mentioned he sees little or no probability of charge cuts for the subsequent six months with inflation nonetheless excessive.
Data launched since then confirmed client inflation slowed to a six-month low of two.8 per cent in January, nonetheless removed from the central financial institution’s goal of two per cent however easing for a 3rd straight month largely because of a fall in oil costs.
BOK board members have mentioned the dangers of performing too quickly might probably set off a resurgence in value pressures particularly because of upside dangers from supply-side constraints.
The consensus from analysts is that the BOK will begin reducing charges within the third quarter of this 12 months, however that may largely rely on when the Federal Reserve begins reducing charges, analysts say.
Thursday’s charge resolution was the primary for board member Hwang Kun Il, who started his three-year time period on Feb 13.
Rhee holds a information convention at round 0210 GMT, which shall be livestreamed by way of YouTube. REUTERS
Source: www.businesstimes.com.sg”