The Bank of Korea unexpectedly kept its benchmark rate at 3%, deviating from economist predictions of a 25-basis-point cut. The decision aims to evaluate shifting domestic and international economic conditions amid escalating political risks and currency volatility.
The Bank of Korea held its benchmark policy rate at 3% in a surprise move so as to assess changes in domestic and external economic conditions
"I mean, on the one hand, even before all of this political uncertainty, the economy wasn't necessarily doing very well. Yes, pockets of the export sector were very, very hot. You know, chips, semiconductors, electronics, but other exports were doing really not very well at all," Holmes said. The won has fallen more than the Japanese yen since the start of October, despite the fact that the BOK has a smaller interest rate differential compared to the U.S. Federal Reserve, Holmes added.
The central bank added that"export growth is expected to slow and domestic demand is forecast to recover at a slower pace than expected due to deteriorating consumer sentiment."
Economics BANK OF KOREA INTEREST RATES ECONOMIC GROWTH INFLATION POLITICAL RISK
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