VIEW: ANZ: Bank Of Korea Signals More Hikes Despite Rising Growth Risks

ANZ note that “The Bank of Korea’s (BoK) decision today to hike its policy rate by 25bps to 2.50% was unanimous and widely expected. It marked a slowing pace of tightening following the BoK’s 50bp rate hike in July and reflected the central bank’s desire to continue addressing inflation risks, while balancing increased downside risks to growth. Importantly, the BoK signalled that more rate hikes are needed, as inflation pressures and expectations remain high. We are sticking with our baseline scenario for a terminal policy rate of 3.0%, which pencils in a 25bp rate hike at each of the central bank’s two remaining policy meetings this year.”