1 Dissent On Hawkish BoK Outlook

BoK Governor Rhee noted the 5-1 board members were open to another hike in the next 3 months. This was down from the August policy meeting, where all 6 board members were open a to hike over this time horizon.

• This is the most dovish development in an otherwise hawkish hold from the BoK. It may signify the bar to any additional hike is quite high though. Still, the main consensus remains for the central bank to continue to judge whether rates need to be raised further.
• The central bank noted the upside risks to inflation "upside risks to inflation have increased due to the effects of higher global oil prices and exchange rates, and due to the Israel-Hamas conflict." "Looking ahead, it is forecast that consumer price inflation will fall to the lower-3% range at the end of this year and will continue to gradually moderate in 2024. " It also noted the downtrend in core inflation was likely to be more modest than previously forecast.
• Note the next CPI print is due on Nov 1.
• On the growth front "domestic economic growth is expected to improve gradually with the easing of the sluggishness in exports. GDP growth for the year is expected to be generally consistent with the August forecast of 1.4%." Uncertainties around the growth outlook are judged to be high given geopolitical risks and major economy developments.