S. Korea's December current account surplus reduced to 7.5 billion USD as compared to November's print of 9.9 billion USD as a result of high deficits on the primary income and services accounts. This offset the goods surplus of 10.8 billion USD, which was aided by higher activity levels as a result of warmer weather conditions in December. During colder winters of previous years, the goods surplus typically tends to be narrower. The full-year current account surplus amounted to 105.97 billion USD which was 7.8% of the GDP.

Finance Minister Yoo noted that the fourth quarter GDP print failed to impress the markets. From the recent monetary policy meeting it seems to be that the BoK is cautious about the constant weak trend in the external demand, especially from China, which the bank perceives to be the weakest as compared to previously expected.

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