VIEW: ING: BoK To Act In May

ING note that “based on higher-than-expected CPI and better-than-expected Q122 GDP results, we think that the BoK will probably pay more attention to curbing inflation in the near future. Additionally, our U.S. team now expects the Federal Reserve to deliver a 75bp hike in June after raising 50bp in May, with the terminal rate reaching 3.25% by the end of 2023. As the BoK will not hold a policy decision meeting in June, more aggressive Fed hikes increase the probability of the BoK’s rate action in May. Therefore, we expect BoK to announce a 25bp hike in May, July and November. Also, based on recent higher-than-expected price gains in underlying pipeline prices and Korean won depreciation, we are also substantially revising up our annual CPI forecasts to 4.6% (vs prev. 3.6%) in 2022 and to 3.0% (vs prev. 2.5%) in 2023.”