Bank of Korean Base Rate Kept at 1.25%

July 14, 2016

A fifth 25-basis point interest rate cut since August 2014 had been implemented at the June monthly policy review, so it’s not surprising that Bank of Korea officials chose to leave the Base Rate steady this time at 1.25%.  In a released statement, Board members predicted modest domestic demand-led growth with considerable uncertainty surrounding that baseline forecast.  Inflation is projected to remain low for the time being and then to “rise gradually as the effects of the low oil prices diminish.”  Several developments are being watched carefully for guidance regarding future policy decisions: “the trend of increase in household debt, the effects of the Brexit, any changes in the monetary policies of major countries, and the progress of corporate restructuring.”

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



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