Bank of Korea Eases Monetary Policy Again

October 16, 2019

The Bank of Korea enacted its second 25-basis point repo rate cut since July and released a statement that suggests more ease may be done. But with two of seven policymakers dissenting in favor of not cutting the main interest rate today, the timing and certainty of a third move has been thrown into some doubt. At 1.25%, the rate level is back to a record low initially experienced from June 2016 to November 2017, and it is only half as high as it was just prior to March 2014. The statement explaining today’s policy easing, which had been anticipated, concedes that growth and inflation looking ahead are likely to be lower than assumed previously and promises to “judge whether to adjust the degree of monetary policy accommodation, while observing any changes in macroeconomic and financial stability conditions and the effects of the two Base Rate cuts. It will also carefully monitor the US-China trade dispute, any changes in the economies and monetary policies of major countries, the trend of increase in household debt, and geopolitical risks.”

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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