Bank of Korea

Bank of Korea

February 23, 2017

South Korea’s central bank retained a 1.25% Base Rate as was expected. That’s been the level for the past eight months. A 25-basis point reduction in June 2016 broke a one-year-long period with no change. Four 25-bp reductions had been implemented in August and October of 2014 and then March and June of 2015. A released statement looks for moderate export-led growth and inflation hovering near the 2% targeted objective during the policy horizon. In addition to the usual risks faced by emerging markets such as U.S. protectionism and European sovereign debt, South Korea must contend with its hostile neighbor to the north, which is moving closer toward full nuclear weapons capability, and a domestic scandal that yet could result in the impeachment and removal of the prime minister and snap elections.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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