To perk up economy, BOK expected to cut interest rateThe Bank of Korea is likely to cut its base rate to 2.75 percent from 3 percent at its policy meeting slated for Thursday, a report by Standard Chartered Korea said yesterday.
In the report released on Sept. 4, Standard Chartered Korea said prolonged sluggish industrial production and export outweighs recovery pace.
“We admit that domestic demand was quite strong in July activity data, while the near-term inflation outlook seems to be worsening owing to fresh food, oil and grain prices,” wrote Oh Seok-tae, chief economist at Standard Chartered Korea. “But the continued weakness in exports and industrial production alone will justify further monetary easing, as it raises the chances of yet another downward revision of GDP growth forecast.”
China’s recovery will boost Korea’s exports and he expects the trade surplus to remain stable at $2 billion per month for the second quarter, Oh said.