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SOUTH KOREA: Weakening Data Wins Over Currency Concerns. 

SOUTH KOREA
EM BulletBulletSouth KoreaAPACEmerging Market News
  • The Bank of Korea (“BOK”) surprised markets cutting rates this morning by 25bps.
  • Overwhelming consensus from economists was for no change as the currency had depreciated over 3% following the cut at the meeting in October.
  • In early trading post the announcement, the Korean Won has weakened by -0.18% and the 5-year KTB has seen yields lower by 6bps.
  • Korean economic data was sufficient to justify the cut with the inflation profile moderating, exports pressurized and the GDP outlook slowing.
  • With many of the key voting members indicating at the last meeting that their preference was for no further changes this year and, a track record of not cutting in successive meetings, this has clearly surprised the market. 
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  • The Bank of Korea (“BOK”) surprised markets cutting rates this morning by 25bps.
  • Overwhelming consensus from economists was for no change as the currency had depreciated over 3% following the cut at the meeting in October.
  • In early trading post the announcement, the Korean Won has weakened by -0.18% and the 5-year KTB has seen yields lower by 6bps.
  • Korean economic data was sufficient to justify the cut with the inflation profile moderating, exports pressurized and the GDP outlook slowing.
  • With many of the key voting members indicating at the last meeting that their preference was for no further changes this year and, a track record of not cutting in successive meetings, this has clearly surprised the market.