First South Korean Central Bank Rate Hike in Around Six Years

November 30, 2017

The South Korean Base Rate was lifted to 1.50% from 1.25% but accompanied by a comparatively dovish statement that doesn’t guarantee subsequent increases soon:

As it is forecast that inflationary pressures on the demand side will not be high for the time being, while the domestic economy is expected to continue its solid growth, the Board will maintain its accommodative monetary policy stance. In thisĀ  process it will judge carefully whether it is necessary to adjust its accommodative monetary policy stance further, while closely checking future economic growth and inflation trends.

Today’s decision did not come as a big surprise because at the previous policy review one committee member had dissented in favor of a 25-basis point hike then. The released statement reveals that officials ” expect that domestic economic growth will be slightly above the rate projected in October” and believe “that consumer price inflation will be in the mid-1% range for some time and then gradually approach the target level. Core inflation will also rise gradually.”

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



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