S. Korean bonds climb after BoK keeps policy rate steady

The South Korean government bonds climbed on Thursday after the Bank of Korea left key policy rate unchanged at the record low. Also, investors sought refuge in safe-haven assets as the central bank lowered its economic growth and inflation forecast in its monetary policy statement.

The 10-year bonds yield, which moves inversely to its price fell 3 basis points to 1.361 percent, short-term 3-year bonds yield dipped 1 basis points to 1.202 percent and the super-long 20-year bonds yield slid more than 3 basis points to 1.446 percent by 05:20 GMT.

The Bank of Korea (BoK) in its Thursday’s monetary policy meeting left its seven-day repurchase rate unchanged at record low levels of 1.5 percent to anticipate the impact of fiscal stimulus and Brexit.

Moreover, the central bank also lowered its Gross Domestic Product (GDP) growth and inflation forecast for 2016 to 2.7 percent and 1.1 percent, from 2.8 percent and 1.2 percent, respectively.

Meanwhile, The Korea Composite Stock Price Index (KOSPI) traded up 0.14 percent at 2,008.32 points by 05:30 GMT.