South Korea president pledges steps for virus-hit economy, rate cut expectations boosts

South Korea president pledges steps for virus-hit economy, rate cut expectations boosts

South Korea’s President Moon Jae-in said on Tuesday that the government would be making a full-scale push to soften the economic blow from the fast-spreading coronavirus. The comment increased expectations of further monetary easing.

The outbreak of the virus disrupted world supply chains and business activity, severely impacting global growth and demand for South Korean goods. South Korea has declared the economy an emergency situation and would need stimulus to increase domestic demand.

The country’s 3-year treasury bond futures extended gains after investors speculated stimulus measures might include an interest rate cut.

“(The government) shouldn’t quibble over whether anything is unprecedented or not, rather, we should take every possible measure we can think of on the table to deploy them,” Moon said in a cabinet meeting.

The rate cut is speculated to pull through after the Bank of Korea’s meeting scheduled on February 27.