The Bank of Korea (BoK) is expected to maintain its policy rate at 1.50 percent on Thursday morning to seek a balance between the nation’s financial stability and economic growth. The central bank will not rush into a second rate rise after delivering a 25 basis points rate hike last November, Scotiabank reported.
Although Korea’s CPI inflation accelerated slightly to 1.5 percent y/y in December from 1.3 percent a month earlier, a benign inflation down the road is seen to have given a favorable base effect.
The central bank is scheduled to hold its monetary policy meeting on January 18, February 27, April 12 and May 24 respectively in the first half this year. Meanwhile, BoK Governor Lee Ju-Yeol’s present four-year term will end on March 31.
"In our view, new central bank chief is less likely to raise benchmark interest rate shortly after he takes the helm," the report added.
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