SEOUL (Reuters) – South Korea’s central bank will likely keep its policy interest rate steady this week but cut next month as economic growth falters in Asia’s fourth-largest economy, a Reuters poll showed.
South Korean exporters have been hit by the Sino-U.S. trade war and the country’s tech manufacturers are also bracing for the impact of Japan’s curbs of exports to Korea of some materials used to make high-tech equipment.
Analysts - Bank - Korea - BOK - Agreement
Twenty-one of 36 analysts surveyed predicted the Bank of Korea (BOK) would leave its seven-day repurchase agreement rate steady at 1.75% at its review on Thursday, the fifth time it will have kept rates unchanged. The remaining 15 analysts predict a cut.
Ten of those expecting no change this week foresee a cut at the next meeting on Aug. 30, indicating that a majority – 25 of 36 analysts – project a rate reduction by the next meeting. Another seven expect a cut later this year.
Consensus - Cut - Quarter - Timing - Thing
“The consensus for a 25 basis-point cut during the third quarter is so strong, and the timing is the only uncertain thing,” said Oh Suk-tae, economist at Societe Generale, who has forecast a cut next month.
At the last meeting on May 31, one of the BOK’s seven board members voted to cut the rate and another wanted a cut in July as economic growth slowed and inflation stayed low. Markets saw the split vote in the decision to keep rates steady as a sign the BOK was shifting to a dovish stance.
Week - Survey - June - Analysts - Reuters
This week’s survey is the most closely contested since June 2015, when 15 of 28 analysts in a Reuters poll saw a rate cut. Eventually, the central bank delivered a surprise cut...
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The beatings will continue until moral improves.