SEOUL, Nov 24 (Reuters) – South Korea‘s central bank will hold its benchmark interest rate steady at 2.50% on November 27, according to a consensus of economists, pushing expectations for a rate cut into the first quarter of next year.
The Bank of Korea (BOK) has been under pressure to ease monetary policy as economic growth slows and inflation remains subdued. While a rate cut was widely anticipated for this meeting, recent economic data and comments from BOK officials suggest a more cautious approach.Economists now predict the central bank will delay any easing until early 2024, assessing the impact of previous tightening measures and monitoring global economic conditions.
The decision comes as South Korea grapples with weakening exports, a key driver of its economy, and concerns about the property market. Inflation in October rose slightly to 3.8% year-on-year, but remains below the BOK’s 2% target.The central bank has previously indicated its willingness to act if economic conditions deteriorate considerably, but has also emphasized the need to maintain price stability.
A pause in November sets the stage for a potential rate cut in February or May, depending on incoming data, analysts say. The BOK last adjusted its policy rate in January, raising it by 25 basis points.
