Bank of Korea: Another cut, prolonged hold to follow – ANZ

ANZ analysts note that the Bank of Korea (BoK) lowered its policy rate by 25bps to 1.25% today, as widely expected, marking the second cut in the current easing cycle and matching its record low.

Key Quotes

“The decision was not unanimous, with two board members calling for a hold.”

“While the central bank has kept the door to further easing open, it also signalled that it wanted to assess the impact of the rate cuts so far.”

“In our view, the hurdle for each additional rate cut will be higher, given the BoK’s limited policy space.”

“Unless growth fails to stabilise as per our expectations, we think today’s cut marks the end of the BoK’s current easing cycle.”