Bank of Korea likely to raise policy rate by 25 bps to 1.75 pct, aiming to protect nation’s financial stability: ScotiaBank
Source: FxWire Pro - Commentary / 28 Nov 2018 03:15:57 America/New_York
The Bank of Korea (BoK) is expected to raise its policy rate by 25 basis points to 1.75 percent at its monetary policy meeting, scheduled to be held on November 30, with the aim of protecting the nation’s financial stability, according to the latest research report from Scotiabank.
South Korea’s household debt reached a fresh high of KRW1,514.4 trillion as at end-September, up 6.7 percent from the same quarter a year earlier. In addition, CPI inflation will likely rise somewhat in the month of November and December on the back of the base effect.
Further, the BoK is not expected to rush to deliver another rate hike in the months ahead as the central bank sees risks of increasing impact from the US-China trade dispute on South Korean exports in the year of 2019, the report added.
As the currency of an export-driven economy, the KRW remains susceptible to external uncertainties including the Fed’s rate tightening path and the US-China trade spat and geopolitical situation on the Korean Peninsula.
"We would like to sell USD/KRW with a target of 1,100 and a stop of 1,140 on hope that the US and China will agree to a ceasefire in the trade war at the Trump-Xi Summit set for December 1," Scotiabank commented in the report.© FxWire Pro 2019. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.