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MNI BOK WATCH: Hikes 25bp, Flags More to Come As GDP, CPI Cut

(MNI) Tokyo
(MNI) Tokyo

The Bank of Korea downshifted to a 25bp hike as growth slows on lower exports and past policy tightening.

The Bank of Korea flagged more interest rate hikes to steer inflation back to its target despite lowering its 2023 forecasts for growth and the consumer price index, as it raised its Base Rate by 25bp to 3.25% after Thursday's meeting of policymakers.

Concerns about inflation remaining above target for a "considerable" time underpinned the unanimous decision to lift rates to the highest level since 2012, though the timing of further hikes and the peak rate was unclear given "different views" among board members due to "high uncertainties" about the economic outlook. The 25bp hike was in line with market expectations. (See MNI BOK WATCH: Downshifting to 25bp Hike As Growth Slows)

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The Bank of Korea flagged more interest rate hikes to steer inflation back to its target despite lowering its 2023 forecasts for growth and the consumer price index, as it raised its Base Rate by 25bp to 3.25% after Thursday's meeting of policymakers.

Concerns about inflation remaining above target for a "considerable" time underpinned the unanimous decision to lift rates to the highest level since 2012, though the timing of further hikes and the peak rate was unclear given "different views" among board members due to "high uncertainties" about the economic outlook. The 25bp hike was in line with market expectations. (See MNI BOK WATCH: Downshifting to 25bp Hike As Growth Slows)

Keep reading...Show less