BoK needs to ease more – ING

Prakash Sakpal, economist at ING, points out that the Bank of Korea will meet next Wednesday, 16 October and the arguments for more cuts has only beco  |  09/10/2019 14:51

Prakash Sakpal, economist at ING, points out that the Bank of Korea will meet next Wednesday, 16 October and the arguments for more cuts has only become stronger over time.

Key Quotes

“The export-led economic slowdown is deepening with the escalation of trade tensions with Japan depressing electronics manufacturing and exports. Extending a streak of double-digit declines to the fourth month, exports contracted by 12% year-on-year in September, with semiconductor persisting to be the weak spot with over 30% fall. While this will be translated into continued GDP growth slowdown, consumer price inflation has also moved into the negative territory in September for the first time ever.”

“We believe the economy is flirting with a recession and, if so, it makes sense the BoK acts sooner than later. The consensus is solidly supporting a 25 basis point rate cut in the current quarter. There are only two meetings to go before the end of the year. In our view, there are greater odds of a 25bp cut next week rather than at the November meeting.”

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