BoK holds as widely expected, outlook and statement largely carried over
As unanimously predicted by forecasters, the Bank of Korea (BoK) held policy rates at 2.50%. The economic outlook in the policy statement was on balance unchanged, with the BoK again saying that the negative output gap was expected to narrow. Similarly, the central bank repeated previous inflation guidance, stating that inflation would “remain low for the time being” but is expected to “gradually rise.” Softening economic demand in the wake of the Sewol ferry tragedy, also mentioned at the previous BoK press conference, contributed to the central bank’s mildly dovish outlook.
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