[South Korea's Choice Financial News Reporter] This view prevails will this month to freeze the base rate of 1.25% in the current year in the direction of the Bank of Korea Monetary Policy Committee meeting to be held 23 monetary policy.
The Bank of Korea is currently ahead of MPC meeting freeze seventh month after made the benchmark interest rate to 1.25% in June last year to 1.5% a year.
As long as one maintains the level of interest rate hikes, given the trend in household debt exceeded one trillion won 1300 while the financial markets in the US Federal Reserve (Fed) and the observed high expectation to watch the situation. If the reference interest rate hikes and increased household debt burden iteoseoda could worsen the already shrinking of the people's economy.
According to the Bank of Korea late last year, household credit balances surged 141.2 trillion won (11.7%) than in 1344 tighten the end of 2015 300 billion won (1203 1000 1 trillion won). As long as one is this balance since 2002, began to come up statistics household credit exceeded 1,300 trillion won for the first time.
Financial Investment Association predicts that 99 percent of respondents base rate freeze in February, a survey of 200 people recent bond market professionals.
On the other hand, the recent international investment bank (IB) are also standard bar embellish the voice of a rate cut this year, the Bank of Korea. In particular, Morgan Stanley predicts that there is gotta cut benchmark interest rates three times this year in an annual record low of 1.25% a year could go down to 0.50%. The pool is so pessimistic that the report of the internal and external political and economic situation, South Korea.
Another US interest rate hike of US interest rate hikes in earnest late last year, the Federal Reserve (Fed) also seems to be a key variable. Based on current interest rates in the United States opened 0.50 ~ 0.75% benchmark interest rate is 1.25% a year in Korea. The United States is capable of reversing the situation when interest rates carried out a rate hike this year, 2-3 times.
In a small open positions and even businessmen Korea border exchange rate volatility due to sudden capital outflows.
In addition to interest rate decisions gather interested in the MPC press conference immediately after the BOK governor Lee Ju-yeol. Etc. April designated "currency manipulator" in a situation report released ahead of the exchange rate likely to come in the US Treasury has spread to the major issues in the foreign exchange market.
Meanwhile, government bonds last 21 days ahead of the Bank of Korea Monetary Policy Committee meeting showed two weak (yields rise). 21, 2010 in Seoul, the bond market maturity Treasury bond yield ended the three-year deal 0.1bp to 1.671%, up from the previous day. The rise in bond yields mean falling bond prices. 5-year interest rate closed at 1.886 percent, up 0.6bp.
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