Bank of Korea

April 19, 2016

A 1.5% seven-day repo rate was retained yet again.  In the Great Recession, the rate was lowered to 2.0% but raised subsequently to 3.0% by July 2010.  The last six changes were all cuts of 25 basis points spaced between November 2012 and June 2015.  The last of these was decided by a unanimous vote.  A statement released by monetary officials observes a continuing downtrend in exports but improvements in the labor market, consumption and economic sentiment.  Total and core consumer price inflation of 1.0% and 1.7% in March were lower than the pace in February, and such is projected  to “fall considerably short of the 2% inflation target for the time being, due mainly to the low oil prices.”  “Bank household lending has sustained a trend of increase at a level exceeding that of recent years, led by mortgage loans.”  Concern about the won seems to have lessened as a result of its settling back against the yen, but the won was very well bid earlier today after officials failed to cut their interest rate.  Like so many emerging market policymakers, Bank of Korea officials are closely monitoring developments outside of South Korea such as “changes in monetary policies or in financial and economic conditions in major countries and the movements of capital flows.” 

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



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