BOK unlikely to cut key rate before Q4, aligning with Fed decision
With the U.S. Federal Reserve (Fed) maintaining a cautious stance on changing its monetary policy, the Bank of Korea (BOK) is expected to follow suit and delay a rate cut until at least the fourth quarter of this year, according to market watchers, Thursday.
Both the U.S. and Korea remain concerned that lowering policy rates prematurely during a phase of persistently high inflation could undermine overall price stability.
On Wednesday (local time), the Fed held a regular meeting of the Federal Open Market Committee (FOMC) and unanimously agreed to maintain the policy rate at 5.25 to 5.5 percent. It also significantly reduced this year’s expected number of rate cuts from three to one.
This is the seventh time that the Fed held the rate steady since July of last year. The policy rate gap between Korea and the U.S. also remained at a historic high of 2 percentage points following the decision.
“Fed Chair Jerome Powell positively evaluated consumer price index results, but maintained a cautious stance, stating that he needs further 토토 confidence in stabilizing prices before cutting interest rates and that the tempo may be slower than what the market expects,” said Park Jong-woo, deputy governor of the BOK, during the meeting at the central bank.