Korea: BOK to Stay on Hold for Now - Nomura

Korea: BOK to Stay on Hold for Now - Nomura

10 May 2016, 06:28
Roberto Jacobs
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Korea: BOK to Stay on Hold for Now - Nomura

Young Sun Kwon, Research Analyst at Nomura, suggests that although their Bank of Korea (BOK) Signal Index suggests a high likelihood of a rate cut this Friday, they maintain their call that the BOK will stay on hold as we believe policy easing will come via a policy mix.

Key Quotes

“We expect the government to announce a KRW15trn (1.0% of GDP) FY16 extra budget as early as June to support employment and the recapitalisation of policy banks, which are likely to suffer during the next stage of corporate restructuring.

We expect the BOK to cut its policy rate by 25p to 1.25% in July and further to 1.00% in October 2016, illustrating how monetary policy must work alongside the fiscal stimulus.”


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