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BoK holds for now, but rates have yet to bottom out

The Bank of Korea (BoK) left its policy rate unchanged today, with the focus shifting to big fiscal stimulus plans and direct support for the financial sector instead. The Bank will also have been influenced by signs of stabilisation in GDP and in the recent monthly business data, and the revival in the stock market. But we believe the weakness in consumer spending and the fragility of the global economy justify further action. Accordingly, we believe rates have further to fall and that they will stay low for the foreseeable future.

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