Today’s decision by the Bank of Korea (BoK) to hold the official 7-day repo rate at 5.00% reflected concerns about oil price-induced inflation and the still relatively high liquidity levels in the financial system. But with domestic demand slowing and the BoK focused on the medium term outlook for prices and activity, we see no reason to revise our call for a 25bp cut next month, and another one in Q3.
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