April 19, 2024

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[THE INVESTOR] A majority of foreign investment banks expect South Korea‘s central bank to raise its key interest rate in November, after the country posted its fastest growth in seven years last quarter.

According to the Korea Center for International Finance and other sources, seven out of 10 major overseas investment banks -- Citi, JP Morgan, Barclays, Goldman Sachs, Standard Chartered, Nomura, and HSBC -- expected the Bank of Korea to increase the rate next month.

BoA Merrill Lynch and Credit Agricole predicted that the hike will take place in the first quarter of 2018. Morgan Stanley suggested the rate will remain flat throughout 2018.

Goldman Sachs said the central bank may increase the rate three times by the end of next year to eventually reach 2 percent.

Citi, BoA Merrill Lynch, and Credit Agricole expected the figure to reach 1.75 percent by the end of 2018.

The central bank decided Oct. 19 to keep the rate at 1.25 percent -- the 16th consecutive month at that level.

Korea’s gross domestic product rose 1.4 percent in the third quarter compared to the previous quarter, the BOK announced Thursday. It also announced on-year growth of 3.6 percent for the national economy.

By Park Ga-young and newswires (gypark@heraldcorp.com)