People overtake the Korea Exchange (KRX) building on December 9, 2024 in Seoul, South Korea.
Daniel Keng | Anadolu | Getty images
South Korean Central bank cut rates Since August 2022, 25 basis points on Tuesday to their lowest, as it attempts to encourage a slow economy.
Bank of Korea cut rates by 3% by 2.75%, in which they were trimmed for the third time in four meetings, in line with the expectations of the economists voted by Reuters.
This decision comes when South Korea President Yun Suk is struggling with political uncertainty on Yeol’s impeachment test.
The constitutional court of the country will be Called for final hearing of the test of Yun Tuesday, according to domestic media.
Soon after the rate decision, the country’s benchmark Kopy The stock index fell 0.46%, while South Korean won 0.2% to trade at 1,431.3 against the US dollar.
Talking to CNBC “Squalk box asia“Alex Homes, director of Asia at an economist intelligence unit, said he hoped that the bok would cut rates rapidly rather than slow.
Bok was initially concerned about financial stability, especially on rebuilding the housing market and Domestic creditHolmes said, but after the martial law flip-flop by Yun in December, the consumer and professional spirit in South Korea shifted the “balance of risks” towards the economy.
He said, “Now there will be concern about supporting economy and inflation, and these concerns about domestic debt will probably take a type of back seat,” he said.
South Korea’s GDP Fourth quarter According to advance estimates, it saw its slowest expansion in six quarters at 1.2%. Bok attributed the recession to consumption and weakness in construction areas.
Widening the rate extending between US dollar and South Korean Won has not seen a meaningful bond capital outflow, the city said in a note earlier this month, which sees the “limited negative effect of weakness” in South Korean which sees the “limited negative effects” in South Korean Financial industry and foreign capital flow won in the country.
South Korea and Japan’s senior economist Min Joo Kong said in a note last week that the political upheaval in Seoul has started a lot of weakness in South Korean victory.
He also said that inflation will remain within the 2% target range of Bok this year, which will give it more space to cut rates amid mutual tariff hazards from Trump administration. South Korean Inflation in January 2.2%climbed a six -month high level of 2.2%, but is still close to the target of 2%of the bok.
However, Kang warned that rate cuts may increase in domestic domestic debt and property prices.
