Bank of Korea

December 10, 2015

For a sixth straight monthly meeting, officials at the Bank of Korea left the seven-day repo rate unchanged at 1.5%.  Four previous cuts, each by 25 basis points, had been engineered in August and October of 2014 and, more recently, March and June of this year.  A statement from monetary officials observes “the trend of declining exports has persisted while the improvement in economic agents’ sentiments has been inadequate.”  Inflation of 1.0% lies below the 2.5-3.5% target, and bank officials worry about the high collective external risk of such things as “changes in the US Federal Reserve’s monetary policy or in economic conditions in emerging market countries including China, the movements of capital flows, and the trend of increase in household debt.”  The baseline scenario projects domestic demand-led growth and continuing low inflation.  Policy changes await clarification of the various uncertainties.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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