Bank of Korea focused on growth, but rates will still rise

The Bank of Korea (BoK) held its policy rate at 2.25% today, as expected. The economy is losing some momentum but growth should not stall, while the won is climbing and is doing some of the heavylifting in terms of tightening monetary policy. We now expect only one 25bp rate hike by year-end, but still anticipate that the policy rate will move up significantly during the course of 2011.

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