The Bank of Korea held the policy rate at 1.5% in January, as expected and revised lower the official growth and inflation forecasts for 2016 to 3% (from 3.2%) and 1.4% (1.7%), respectively. The statement that followed had a more dovish tilt, as compared to a neutral tone in December.

The shift in the tone of statement was likely a deliberate move by the bank to mitigate volatility arising from the Fed rate hike. Indeed, the governor refuted suggestions that the BoK continues to keep rates on hold to maintain financial stability, suggesting the BoK could still ease, if needed.

"We expect the BoK to deliver another 25bp rate cut in Q1, ahead of the National Assembly elections in April 2016. With the increasing focus on tackling weak exports, we continue to believe the incoming Finance Minister will continue to target a weaker KRW - as opposed to raising fiscal spending," said Barclays in a research note.