Bank of Korea Seen Raising Rate 0.25 Point as Inflation and Won Pressures Build
Updated
Updated · 매일경제 · Jul 8
Bank of Korea Seen Raising Rate 0.25 Point as Inflation and Won Pressures Build
3 articles · Updated · 매일경제 · Jul 8
Summary
A 0.25-percentage-point hike is the most likely outcome at the Bank of Korea's next policy meeting, with experts saying a hold would jar markets after Governor Shin repeatedly signaled tighter policy.
Inflation expectations, a stronger GDP outlook, and the won's weakness are driving that view, while exchange-rate pressure and real-estate risks are seen as key burdens for policymakers.
Even at a 2.5% benchmark rate, former officials and academics said rising inflation expectations could lower the real rate, leaving room for one or two further increases toward a neutral level.
The committee is still expected to keep a hawkish tone even if it moves only gradually, while pairing any hike with calls for separate support for small businesses and vulnerable borrowers.