Bank of Korea expects lower inflation in Q2. Pours cold water on rate cut expectations. | Forexlive

Bank of Korea Governor Rhee comments following this morning’s ‘on hold’ rate decision:

• Tuesday’s rate decision was unanimous
• Five board members
  wanted to keep the door open for one more possible rate hike
• Central bank will
  not respond to specific fx rate level
• High public utility
  price rises in 2023 to be responsible for high core inflation
• Annual inflation to
  fall below 4% in Q2
• Uncertainty still
  high over inflation projection for H2
• Many board members
  think market expectations for rate policy are excessive
• Many board members
  see market expectations for rate cut this year as somewhat excessive
• Consideration of
  rate cut possible only when inflation is headed far below projection
• Chances of real
  estate market’s soft landing increased vs last year
• Several board
  members see need to give warning against early rate cut expectations

Headlines via Reuters