12 August, 2020

Mexico policy rate seen on hold in July, may be raised by year-end: Reuters poll

SEOUL (Reuters) – South Korea's central bank is predicted to have its 1.Five percent cash rate unchanged if it meets on Thursday, a Reuters poll found, however it might lift the interest rate before year-end if monetary policies tighten globally.

All just one of your 16 economists inside Reuters poll predicted the bank account of Korea would stop at 1.50 % , as being the sluggish economy and uncertainty from U.S.-China trade friction limits its readiness to make borrowing costs.

But 12 with the 16 respondents revealed that the BOK would raise its policy interest rate before year-end to curb any potential capital outflows for the reason that U.S. Federal Reserve carries on raise its rates.

“The BOK won't be capable of raise rates now, given how shockingly bad the May job report was," said Kang Seung-won, an economist with NH Investment & Securities.

Kang says a rate hike is probable in August when the BOK will endeavour to stay on the right course with all the U.S. Federal Reserve and also the European Central Bank, that happen to be anticipated to raises their rates and lessen monetary stimulus measures this current year.

"Domestic employment situation conditions may also improve inside months ahead because the government's extra budget is going to be spent this month and then suddenly," Kang said.

Statistics Korea said South Korea added 72,000 jobs in May from a year earlier, well within the annual 123,000 jobs gained in April, marking the weakest increase in in excess of eight years.

That, in conjunction with falling exports, cast some doubt on any policy tightening this current year. Your budget of Korea's last rate move would have been a 25 basis point hike to a single.Half in November.

June exports were down 0.One percent from your year earlier, as shipments of cars and gadgets fell sharply, slumping from the 13.2 percent jump in May.

"Barring rising U.S. rates of interest, the BOK is probably not in rush to get rates again in the near term," said Oh Suk-tae, an economist at Societe Generale (PA:SOGN).

The BOK may also revise its growth outlook on Thursday within an every three months review. It currently sees the economy growing Three percent at the moment.

After Thursday's meeting the central bank has three more rate reviews at the moment in August, October and November.