BoK: another 25 bps rate cut is not ruled out – UOB

The Bank of Korea (BoK) could reduce its key rate by 25 bps at the October meeting, suggested Researchers at UOB Group in the Quarterly Global Outlook.

Key Quotes

“Given the race to lower interest rates amongst central banks, the BOK has tried to manage market’s expectation of its monetary policy easing by flagging out the limitations of further rate cuts”.

“Still, with the trade uncertainties and downside growth risk as well as the weaker-than-expected domestic inflation, we continue to see the possibility of a second rate cut by the BOK this year (after the 25 bps cut in July) to bring the base rate to 1.25% by end-2019, matching the record low during June 2016-October 2017”.

“We think the rate cut could be delivered on the 17th October meeting which will be the second last BOK meeting for the year”.