HSBC: Bank of Korea Unlikely to Hike Rates in the Near Term

Deep News01-16

According to a research report by HSBC economist Jin Choi, the Bank of Korea is unlikely to raise interest rates in the near term, despite signaling an end to policy accommodation. Choi stated that, given inflation is not expected to approach the central bank's 2% target until 2026-2027 and the nation's economic performance remains lackluster, any market pricing for a Korean rate hike would be "overly aggressive." He indicated that while concerns over financial stability might delay potential rate cuts, they would not prompt the Bank of Korea to hike rates in the coming quarters. On Thursday, the Bank of Korea held its benchmark interest rate steady for a fifth consecutive meeting and removed references to possible rate cuts from its policy statement.

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