Bank of Korea could keep interest rates unchanged for 2020

South Korea’s central bank is expected to keep its interest rates unchanged on Wednesday amid rising concerns over increasing household debt and property prices, which could be affected on any policy changes.

The Bank of Korea (BOK) kept its rates at a record low of 0.50%, according to 34 analysts surveyed by Reuters, after a total of 75 basis points in rate cuts since the outbreak of coronavirus pandemic.

Among the 27 analysts who provided forecasts for end-2021, 22 saw the BOK standing pat by end of next year, while the other five forecast rate hikes during the second half of 2021.

In late August, the central bank sharply lowered its 2020 growth outlook to a 1.3% contraction, making it its worst since the 1998 financial crisis and suggested it was willing to expand the use of policy tools other than benchmark interest rates.

The BOK will announce its rate decision around 0100 GMT on Wednesday, with the governor’s news conference scheduled to be broadcasted live on YouTube starting at 0220 GMT.