• Bank of Korea likely to hike interest rate by 25 bps in November

    Source: FxWire Pro - Commentary / 29 Nov 2017 07:52:51   America/New_York

    The Bank of Korea is expected to remain on track to hike rates. According to a Scotiabank research report, the South Korean central bank is likely to hike its policy rate by 25 basis points to 1.50 percent on Thursday to seek a balance between the country’s financial stability and economic growth.

    The nation’s media Yonhap news cited sources reporting Tuesday evening that the tourism authorities of China decided to partly lift its bans on group tours to South Korea. This will stimulate the country’s tourism revenue and economic growth, stated Scotiabank. In the meantime, the central bank is unlikely to rush into a second rate hike in the near future.

    South Korean financial experts recognized rising household debt, geopolitical risks and looming U.S. rate hikes as the top-3 systemic risks facing the country’s financial system.

    Household debt including loans and other debt owed by South Korean households was up 9.5 percent in the third quarter to KRW 1,419.1 trillion on a year-on-year basis.

    “The oversold USD/KRW is expected to rebound towards 1,100 in response to North Korea’s latest missile launch and amid a broadly strengthening dollar”, added Scotiabank.

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