Citigroup: Bank of Korea May Exclude Rate Cut Option in April, Expected to Hold Rates Steady Until 2026

Deep News
Jan 07

Citigroup economist Jin-Wook Kim indicated that the Bank of Korea could potentially remove the interest rate cut option from its policy agenda as early as April. It is anticipated that the central bank will maintain the benchmark rate at 2.50% during its policy meeting on January 15, as its monetary policy is shifting towards a prolonged hold strategy, although officials have still kept the rate cut option available. He stated that Bank of Korea Governor Rhee Chang-yong might express concerns regarding financial stability at this meeting, particularly issues related to the weakness of the Korean won against the U.S. dollar, while also ruling out the possibility of an interest rate hike in the first half of the year. Furthermore, Citigroup forecasts that the Bank of Korea will not raise interest rates in 2026 either.

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