Bank of Korea Likely to Take More Gradual Approach to Rate Hikes
Dow Jones08-27 11:46
0346 GMT - The Bank of Korea is likely to take a more gradual approach to policy tightening in coming months after its second straight rate hike in August, says Capital Economics' Gareth Leather. The BOK "will be under less pressure to raise rates further" especially as the Korean won strengthens, the economist writes in a note, adding that the Korean economy is strong enough to absorb the latest rate increase to 3.00% from 2.75%. Dave Chia, an economist at Moody's Analytics, calls the BOK board's consecutive rate hikes as a pre-emptive move. "The board is acting on where inflation is heading, not where it is," Chia says. He expects one more rate increase this year.
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