Bank of Korea 7month 16rate 25bp hike expected, back-to-back hike possible
A Korea Investment & Securities analyst 7month 16day Monetary Policy Board meeting, the Bank of Korea is expected to unanimously raise the policy rate by 25bp (0.25percentage points). The analyst said the possibility of a consecutive hike in 8month remains open depending on its assessment of core inflation.
Korea Investment & Securities analysts Choi Ji-wook and Moon Da-un expect the Bank of Korea to unanimously raise the policy rate at the Monetary Policy Board meeting on 7month 16day by 25bp (0.25percentage points). This is an event that investors should immediately monitor for future lending rates and financial-market volatility.
In a report released on 9day, the analysts wrote that the Bank of Korea may judge that growth remains solid and inflation will stay above target for the time being. The report pointed out that particular attention should be paid to core inflation, which excludes food and energy prices.
The report said the Bank of Korea's assessment of core inflation is the key variable in its rate-hike decision, adding that depending on that criterion, the possibility of consecutive hikes in 7month following 8month remains open. At the 5month Monetary Policy Board meeting, the Bank of Korea had left the policy rate unchanged at 2.50%.
The researchers 5analyzed that exports and facility investment have been performing well since the month, particularly in the information technology (IT) sector. The report concluded that the Bank of Korea will determine its interest-rate path by considering growth and inflation trends together.
The researchers said the report detailed the background for keeping open the possibility of a rate hike and the Bank of Korea’s key evaluation points. Investors need to check the results of the Monetary Policy Board meeting on 7 month 16 day and the Bank of Korea’s explanation regarding core inflation.
Sources: 연합인포맥스
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