Korean government's increased efforts to recycle Korea's current account surplus is in line with the focus on engineering a weak KRW bias will continue. The broader trend stays steady, marked by slow inventory clearance and production lack.
While the country's domestic demand and services stabilized after the MERS outbreak, the challenging export environment and some sequential private consumption payback might effect growth momentum in Q4, cutting into job growth and profitability.
"We believe the BoK will deliver another 25bp rate cut in Q1, ahead of the National Assembly elections in April 2016. We also believe a weak KRW bias remains, as the government continues to encourage state entities to recycle the current account surplus by stepping up overseas loans and investments, or by stockpiling essential minerals and fuels", says Barclays in a research note.


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