Bank of Korea steadies rate, trims GDP forecast amid virus surge

27.08.2020 - Davydova Maria
Bank of Korea steadies rate, trims GDP forecast amid virus surge

The Bank of Korea kept its key interest rate steady on Thursday. The central bank’s predicted move came nothing as a surprise as policymakers are more pressured to take more actions to prevent the resurging coronavirus infections from deterring the recovery of the country’s virus-beaten economy.

The BOK held its 0.5% seven-day repurchase rate as anticipated by 22 analysts surveyed by Bloomberg. Moreover, the central bank also remarked that it now expects the country’s economy to shrink 1.3% this year. The new forecast is worse than its 0.2% contraction prediction in May. The BOK also sees inflation going up 0.4% from a previous forecast of 0.3%.

After the BOK slashed its economic forecast, the country’s 10-year bond yield went down 3 basis points to 1.38%. The won advanced 0.1% to 1,185.65 per dollar amid broad risk-on sentiment.

To date, the BOK has cut its benchmark rate by 75 basis points year-long to cushion the impact of the coronavirus pandemic, to go along with purchasing bonds and supplying liquidity to keep markets active. Ultimately, the South Korean government has also implemented the biggest stimulus on record ever, preparing three extra budgets for this year.

Risk disclaimer "PROMETHEUS LTD – Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 is a financial services institution outside the European Union Area, which is subject to the supervision of the IFMRRC Certificate 0395 AA V0155 Trading in Forex/ CFDs and Other Derivatives is highly speculative and carries a high level of risk. It is possible to lose all your capital. 70% of trading deals can be unprofitable. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. Speculate only with funds that you can afford to lose. This Website may contain information in particular regarding financial services and products that could be regarded b a E.U. supervisory authority as an offer of financial services targeted in Europe. ESMA intervention measures do not apply to customers of PROMETHEUS LTD and it is your responsibility to choose a company which is most suitable for your trading needs. By clicking continue you confirm that you have read, understood and agree to the risk disclosures, terms of service, cash policies, privacy policies and this notice and that you are visiting this website on your own initiative, without any encouragement whatsoever from or PROMETHEUS LTD." Cookies notification: We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we assume that you are happy with it. Read more. Continue

Help with deposit?