The Bank of Korea is expected to keep its policy rate intact this month though a rate cut may be inevitable down the road to help boost growth, local experts said in a survey released July 15.
In the survey by Infomax, the financial news arm of Yonhap News Agency, eight out of 13 experts surveyed expected the BOK to stand pat at its rate-setting meeting slated for July 18.
“The BOK too will likely cut its rate amid a close race between the United States and eurozone economies to increase their monetary easing. However, it may be difficult (for the BOK) to do so in July because its monetary board meeting will be held before those of the US Fed and the European Central Bank,” DB Securities analyst Moon Hong-cheol said.
The BOK has kept its policy rate frozen at 1.75 percent since November but has increasingly been facing tough calls to support the country‘s economic growth amid a steady decline in exports and low inflation.
“Concerns of slowing growth are growing amid disappointing figures for both exports and domestic consumption,” Daishin Securities analyst Gong Dong-rak said.
This week, the central bank is expected to trim the economic outlook as well.
The analyst still expected the central bank to employ a wait-and-see mode.
“Instead of cutting its rates ahead of a US move, I expect the BOK to act after waiting to see what happens,” Gong said. “I expect the bank to cut the key rate at its next monetary policy board meeting.”
All 13 experts surveyed expected the BOK’s monetary policy board to cut the key rate to 1.50 percent at its next meeting, slated to be held Aug. 30.
By Ram Garikipati and newswires (firstname.lastname@example.org)