Bank of Korea
August 11, 2016
South Korea’s Base Rate, which had been cut in June for the first time in a year but was left unchanged after July’s monthly policy meeting, was again not changed following the latest review. A statement again reaffirmed the view that inflation, now under the 1-3% target range at 0.7%, will continue to be low for the time being. Domestic demand-led growth is projected, mitigated by a downtrend in exports. The won has strengthened recently. In an abundance of uncertainty looking forward, the statement enumerates some factors that officials are paying close attention to such as “the trend of increase in household debt, any changes in the monetary policies of major countries, and the progress of corporate restructuring.” 23-basis point rate cuts were also done in August 2014, October 2014, March 2015 and June 2015.
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