Bank of Korea likely to cut interest rate by 25 bps to 0.50 in May

The Bank of Korea is set to meet tomorrow for interest rate decision. According to a DBS Bank research report, the central bank is likely to lower the key interest rates by 25 basis points to 0.50 percent.

Although COVID-19 has been brought under control in the country, the risk of second-wave infection remains in place and domestic activities continue to be below normal. In the meantime, exports have begun dropping since April. CPI growth has eased closed to zero.

“The deeply negative output gap and the rise in deflation risks will likely continue to put pressure on the BOK to ease monetary policy”, added DBS Bank.