Bank of Korea

April 13, 2017

South Korea’s central bank base rate was cut five times from August 2014 to June 2016 by a total of 125 basis points, halving the key interest rate to 1.25%. While modestly bumping up projected GDP growth in 2017 from 2.5% that was forecast three months ago, monetary officials still anticipate only moderate expansion and overall CPI inflation of about 2.0%. Core inflation will be somewhat lower than the total figure, and personal consumption remains low. According to a released statement,

As the inflationary pressures on the demand side are not expected to be high given the moderate pace of domestic economic growth, the Board will maintain its stance of monetary policy accommodation. In this process it will closely monitor conditions related to trade with major countries, geopolitical risks, the progress of monetary policy normalization by the US Federal Reserve, and the trend of increase in household debt.

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



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