Overnight, the Bank of Korea held interest rates at 2%.
BoK Governor Lee Seongtae says that until he sees major economies like the U.S. and UK upping rates, a delay is necessary to preserve Korea’s economic interests.
RBS: BoK interest rate decision: Rates were held steady at 2% given uncertainty about the growth outlook “due to the risk of delay in a full-fledged recovery of the major advanced economies”. The Governor added, though, that “a rate increase doesn’t necessarily mean a policy tightening” given the “gap between the current rate . and rates after normalisation”. We still expect a 25bp hike in Q2 and 75bp over 2010.
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