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SOUTH KOREA

BoK Growth Forecast Could Be At Risk

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  • This week, the CNB and NBH joined Russia, Turkey and Brazil in being the fourth and fifth central banks to start raising rates to curb the inflationary pressures among the major EM central banks.
  • The CBRT, CBR and CBB started their tightening cycle earlier this year as the inflation risk was starting to surge amid strong economic and political uncertainty and currency weakness.
  • Both Czech and Hungarian policymakers have hinted markets that they stand ready to hike interest rates gradually in the coming meetings.
  • However, the uncertainty over the economic recovery remains elevated.
  • Will EM central banks be able to raise quickly if economic uncertainty continues to increase?

Source: Bloomberg/MNI