People pass the Korean Exchange (KRX) building in Seoul, South Korea on December 9th, 2024.
Daniel Chen | Anadoru | Getty Images
South Korea Central bank reduction rate Since August 2022, 25 basis points have been at its lowest since Tuesday, striving to stimulate a slower economy.
The Bank of Korea trimmed for the third time in four meetings, with expectations from the economists voted by Reuters, cut from 3% to 2.75%.
This decision comes as South Korea continues to tackle political uncertainty over President Yoon Soo-Yeol's ammo each trial.
The national constitutional court will do so We will convened for the final hearing of Yoon's trial. According to domestic media, it was Tuesday.
The national benchmark immediately after the fee decision Kospi The stock index fell 0.46%, with the Koreans winning weakening 0.2% to trade at 1,431.3 against the US dollar.
Speaking to CNBC's Squawk Box Asia, Alex Holmes, director of Asian research for the Economist Intelligence Unit, said he expects Bock to cut faster than it slows down.
BOK initially was concerned about financial stability, particularly around the housing market and household debt reheating, but following Yoon's martial law flip-flop in December, South Korean consumers and business sentiment fell sharply and changed the “balance of risk.” Economics, Holmes said.
“Now there are concerns about supporting the economy and inflation. These concerns about household debt will probably be like some sort of backseat,” he added.
According to prior estimates, South Korea's GDP growth in the fourth quarter missed expectations, clocking the slowest expansion in the sixth quarter at 1.2%. BOK believes the slowdown is attributed to weakness in the consumption and construction sector.
The expansion between the US dollar and South Korea's victory has never seen any meaningful bond capital outflows, City said in a note earlier this month. The flow of financial industry and foreign capital.
Min Joo Kang, senior economist at ING, said last week that political turmoil in Seoul had eased the political turmoil that caused excessive weakness in South Korea's victory.
She also said inflation remains within Bock's 2% target this year. South Korea's inflation rose to a six-month high of 2.2% in January, but is still close to Bock's 2% target.
However, Kang warned that interest rate cuts could accelerate the rise in domestic household debt and property prices.
