VIEW: Goldman Sachs: BoK Returns To A Baby Step Hike, With Dovish Guidance

Goldman Sachs note that the BoK returned “to a baby step hike from a big step hike of 50bp in its previous meeting. The decision was unanimous and in line with expectations. The most notable change to the MPC statement was an inclusion of the duration of the hike cycle, noting the need to sustain policy rate hikes "for some time," which the BOK Governor clarified as three months. A slight majority of three MPC members believed the appropriate level of terminal rate to be 3.5%, with two preferring 3.75% and one quoting 3.25%. These suggest that we could see another 25bp hike in Q1, but beyond this, policy rate hikes could end or become intermittent. We continue to expect two more 25bp hikes in 2023, one in Q1, still most likely in February, and once in Q2”.