Free Trial

BOK Preview - February 2021: Take Aim At Bond Markets

The Bank of Korea are expected to keep monetary policy settings unchanged at its Feb 25 meeting, all 20 economists surveyed by Bloomberg forecast the base rate on hold at 0.50%.

The BoK are expected to keep rates on hold until at least 2022 as its attempts to balance rising financial risks and an uneven recovery. Neither are the bank expected to cut rates given the 75bps of cuts last year and historic lows for rates, even looser policy could expose South Korea to further risks too given already elevated levels of household debt.

The bank has emphasized it is cognisant of the risk to stability from shocks, and as such is likely to take extra caution to signal any shifts in policy to avoid market shocks.

In recent weeks discussion has centred around the latest special budget and extra issuance that will finance it. This has seen demand wane for government bonds, Governor Lee Ju-yeol earlier this week reiterated that the bank stands ready to stabilize bond markets as needed.

Full preview here:

BoK preview Feb 2021.pdf

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.