EARLIER RATE MOVESeok Byung Hoon, professor in the Department of Economists at Ewha Womans University, said: “Consumer prices are trending toward the (BOK) target (of 2%), and domestic demand and investment are showing signs of stagnation,” he said.“Considering the monetary policy lag, a rate cut needs to take place during the third quarter.”Thirteen out of the 19 economists and analysts forecast South Korea’s base rate to decline by 25 basis points to 3.25% by the end of this year.
Its last rate cut was in May 2020 when it lowered the base rate by 25 basis points.“Considering recent remarks by BOK Governor that emphasized his confidence in price stability, BOK is unlikely to move ahead of the US in a rate decision,” said Hye Mi You, professor in the College of Economics and Finance at Hanyang UniversityPark Choonsung, senior economist at Korea Institute of Finance, predicts the Fed will make its first rate cut for 2024 in September and the BOK will follow suit in October.
In April this year, the won slid to a 17-month low against the greenback, hitting 1,400 per dollar, its weakest since Nov.7, 2022.“The dollar/won rate may rise to 1,440 won due to the growth gap between Korea and the US,” said NH Investment & Securities economist Ahn Ki-tae in the poll.
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