Bank of Korea

October 19, 2017

Although keeping the Bank of Korea Base Rate unchanged at 1.25%, its level since a 25-basis point cut in June 2016, the vote to do so was not unanimous and an accompanying statement revised projected GDP growth and inflation slightly upward. Exports and business investment are performing well. Labor market conditions have improved. There are price pressures from food, downward base effect pressure on the CPI is fading, and core inflation is expected to rise eventually. The policy stance is quite accommodative, as five 25-basis point interest rate cuts were implemented between August 2014 and mid-2016, and one Board member was ready to hike rates at this month’s meeting.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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