Standard Chartered Bank: Distortions in data keeps BOK MPC in wait-and-see mode

Quotes from Standard Chartered Bank

In our view, the recent mixed data performance points to an eventual rate cut.


CPI inflation has been slowing for the past four months, with the latest 0.5% y/y reading the lowest in 15 years.

 
In contrast, sentiment has improved: February readings indicating the outlook for March showed a rebound in the business sentiment index (BSI) to 82 from 73 and a rise in the composite consumer sentiment index (CCSI) to 103 from 102.

 
We expect the BoK to hold off on a rate cut in March as it waits for the potential seasonal bias in the data and mixed messages from sentiment indexes to clear. However, the clearly negative data trend and the need to support the economy further support a rate cut in Q2.