BoK expected to remain on hold in the near term – UOB

Economist Ho Woei Chen, CFA at UOB Group, reviewed the recent decision by the BoK to keep the key interest rate unchanged.

Key Quotes

“Bank of Korea (BOK) kept its benchmark interest rate unchanged at a record low of 1.25%, in line with consensus and our expectation. BOK Governor Lee Ju-yeol said the rate decision today was not unanimous with 1 out of 7 board members voting to cut rate”.

“Having cut interest rate twice since July this year, Governor Lee continues to signal room for further cuts but said the central bank remained mindful of financial imbalances and it is reviewing the short-term impact from earlier rate cuts. And given that the momentum for monetary easing by global central banks has appeared to be slowing, we expect the BOK to be on hold in 1Q20 with further easing being contingent on the deterioration in economic outlook. [Friday was] BOK’s last meeting for the year and the first meeting in 2020 will be held on January 17”.