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Korea’s central bank to cut next year

The Bank of Korea (BoK) kept its base rate at 3.25% today, as expected. The BoK’s commentary suggests it still expects to resume rate increases once concerns over the outlook for the global economy abate. We think the chances of that happening are low. Given the likelihood that Korea’s inflation will fall next year, we have revised our view and now expect the base rate to be cut in 2012.

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