South Korea Gets Its First Central Bank Rate Cut – Currency Thoughts

South Korea Gets Its First Central Bank Rate Cut

October 11, 2024

The Bank of Korea, whose base rate had stayed at a peak 3.50% since a culminating 25-basis point increase in January 2023, finally joined the group of monetary authorities that have begun to lessen policy restrictiveness. Market players had anticipated this decision. Today’s cut reverses the aforementioned final hike in January 2023, and a released statement concludes that more rate reductions will follow but in a cautious manner. South Korean CPI inflation had decelerated from 6.3% in April 2022 to a 43-month low of 1.6% last month. Uncertainties persist regarding world energy prices and the won, while Korea’s housing market has become less tight.

Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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