Bank of Korea Hikes Base Rate to 1.75%
November 30, 2018
The Bank of Korea‘s benchmark interest rate has been raised by 25 basis points to 1.75%. This was the second such increase of the cycle following an initial tightening in November 2017, which had been the first hike since 2011. In between, there were five 25-basis point cuts from March 2014 to June 2016. A statement from the Policy Board does not suggest any urgency to enact a third increase very soon.
As it is forecast that inflationary pressures on the demand side will not be high for the time being, and that the domestic economy will sustain a rate of growth that does not diverge significantly from its potential level, the Board will maintain its accommodative monetary policy stance. In this process it will judge whether it is necessary to adjust its accommodative monetary policy stance further, while closely checking future economic growth and inflation trends. It will also carefully monitor conditions related to trade with major countries, any changes in the monetary policies of major countries, financial and economic conditions in emerging market economies, the trend of increase in household debt, and geopolitical risks.
Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Korea
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