On May 25, after experiencing a year-and-a-half-long tightening cycle, with both inflation and economic growth slowing down, the Bank of Korea kept interest rates unchanged for the third time in the interest rate resolution held today.
The decision matched forecasts of all 40 economists polled by Reuters. Most respondents expect the next rate hike to be a cut, likely in the last quarter of the year.
In order to curb inflation, the Bank of Korea began to raise interest rates as early as August 2021, and a cumulative increase of 300 basis points has been raised as of January this year.
In addition, the Bank of Korea lowered its economic growth forecast for this year to 1.4 percent from 1.6 percent forecast in February, while maintaining its inflation forecast for this year at 3.5 percent.
Changyong Rhee, governor of the Bank of Korea, has repeatedly expressed the possibility of lowering the bank’s economic growth forecast.