Bank of Korea still on course for an August rate hike

The Bank of Korea (BoK) left its main policy rate on hold at 0.50% today and signalled that a rate hike is still very much on the table this year. While the worsening virus situation has made things more uncertain, comments from the press conference suggest that if the economy proves resilient, as we expect, a hike on 26th August is still in play.
Alex Holmes Emerging Asia Economist
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Emerging Asia Economics Weekly

Recent rate hikes not the start of a trend

Attention over the past week has been on the region’s more hawkish central banks, following rate hikes in Korea and Pakistan. Both countries, along with Sri Lanka (which unexpectedly left rates unchanged at its meeting on Thursday) are likely to raise interest rates further over the coming months. But these countries are very much the exception. For the rest of the region, we think interest rates will remain on hold as central banks look to keep monetary policy loose to support recoveries. Meanwhile, virus cases are rising again in Vietnam. While restrictions have been tightened, they have so far been fairly light touch, including a closure of bars and nightclubs and capacity limits on restaurants in some southern provinces. Nevertheless, the jump in cases will be watched closely by global carmakers, which were hit hard by the disruption from previous factory closures.   Drop-In: Why is Asia sitting out the global inflation surge? 09:00 GMT/17:00 HKT, Thursday 2nd December Drop-In: India – How much scarring will the pandemic leave? 10:00 ET/15:00 GMT, Wednesday 1st December

26 November 2021

Emerging Asia Economics Update

Bank of Korea to hike at least three more times in 2022

Today’s move by the Bank of Korea is likely to mark the second hike of at least five, in a tightening cycle that began in August and will extend well into next year.

25 November 2021

Emerging Asia Data Response

Singapore GDP (Q3, Revised)

Revised Q3 GDP data show that Singapore’s economy grew more strongly than first thought last quarter, and while containment measures mean the recovery is unlikely to have gained much momentum so far this quarter, a gradual reopening should see growth accelerate in the coming months.

24 November 2021

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Emerging Asia Data Response

Singapore GDP (Q2, Advanced)

The economy stumbled in Q2 after the government reimposed restrictions in response to a spike in virus cases, but with new infections down and the government rolling back containment measures, the recovery should regain momentum over the coming months. We still expect GDP to expand by 6% in 2021, at the top end of the government 4-6% estimate.

14 July 2021

Emerging Asia Economics Weekly

Singapore bouncing back, rate cut for the Philippines

The government in Singapore is starting to ease restrictions, and the success of the country’s vaccination programme will hopefully allow a rapid return to normality. This should set the stage for a decent economic recovery over the coming months. Inflation in the Philippines fell back in June and is likely to decline further over the coming months, which should open the door for rate cuts to support the struggling economy.

9 July 2021

Emerging Asia Economics Update

Malaysia: rates to remain low for a long time

The fact that Bank Negara Malaysia (BNM) left its policy rate on hold at 1.75% today despite the poor economic outlook means any further loosening is unlikely. But with the recovery set to be slow and fitful, we think BNM will leave interest rates at their current low until at least the end of 2022.

8 July 2021
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