Bank of Korea

February 16, 2016

The seven-day repo rate was left at 1.5%, its level since a 25-basis point cut last June.  Five such reductions were spaced out between May 2013 and June 2015.  Monetary officials, who meet monthly, released a statement, projecting sub-trend, domestic demand-led growth and low inflation.  Considerable attention is being devoted to “external risk factors such as any changes in the monetary policies of major countries or in financial and economic conditions in China, the movements of capital flows, geopolitical risks, and the trend of increase in household debt.”  The statement notes that the won is weaker than at the time of the last policy meeting against both the dollar and yen.  Excessive won strength has been a problem for some time.  In January, on-year CPI inflation fell a half percentage point (ppt) to 0.8%, and core dropped 0.6 ppt to 1.7%. 

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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