BoK Statement - Rate Cut Timing To Be Considered, While Assessing Multiple Factors

In terms of the policy outlook the BoK made the following reference in its statement: "Given the underlying uncertainties regarding the future path of inflation, however, it is necessary to further assess whether inflation will continue its slowing trend. In addition, it is also necessary to assess the impacts of foreign exchange markets, housing prices in Seoul and its surrounding areas, and household debt on financial stability. Therefore, while maintaining a restrictive monetary policy stance for a sufficient period of time, the Board will examine the timing of a rate cut."

• The central bank added "In this process, the Board will thoroughly assess the slowing trend of inflation and the trade-off between policy variables, such as growth and financial stability."
• The above doesn't given fresh fuel for those looking for the easing cycle to commence in August at the next policy meeting. On balance it still appears as if the BoK board wants more time to assess the above factors.
• We still have Governor Rhee's press conference, which is due to begin shortly, which may shed more light on the policy biases (whether there was nay dissent to today's decision and those open to a cut in the next 3 months).
• The central bank also noted headline CPI could be lower than the 2.6% y/y 2024 forecast made in May. The Core CPI forecast of 2.2% has been consistent with recent outcomes.