Free Trial

VIEW: Barclays: Time For The BoK To Recalibrate Its Policy Function


Barclays note that “with Q4 GDP registering a contraction, we believe the Bank of Korea (BoK) has to shift its gears for a policy turnaround and a 25bp cut in Q4 23."

  • “In our view, the BoK governor's clearly more dovish tone in the foreign correspondents club meeting - compared with the post-Monetary Policy Committee press conference just a week earlier - underscored the BoK's concern about the combination of a sharper-than-expected slowdown in external demand and a moderation in domestic demand momentum. This suggests a gradual recalibration of the bank's policy function towards balancing growth, inflation, and financial stability, and away from the focus on curbing inflation.”
  • “Our base case remains for the BoK to remain on hold through Q3 and a 25bp cut in Q4, as early as the October meeting. We continue to believe the hurdle for additional hikes is high.”
  • “Going into H2, we expect the MPC's discussion to become more focused on risks to growth. In our baseline, we do not expect a substantial easing cycle into 2024, given our view of a pickup in exports and investment in H2, as well as structural financial imbalances such as high household debt and an over-leveraged corporate sector. That said, risk of additional cuts could increase.”
MNI London Bureau | +44 0203-865-3809 |

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.