BOK to decide key rate today...Interest in the Downward Growth Rate

The Bank of Korea (BOK) will hold its last Monetary Policy Committee meeting today (28th) to decide the benchmark interest rate.

The interest rate was cut once last month and is currently 3.25% per annum.

Considering only the domestic situation, there is a possibility of a reduction this month.

This is because consumer price growth has stabilized at 1% for the second consecutive month, and household debt and housing prices have also declined.

In particular, the slowdown in export growth amid a slow recovery in domestic demand and the darkening economic outlook are also bolstering the cut.

However, instability in the won-dollar exchange rate, which goes around 1,400 won, has emerged as a big variable.

In addition, the U.S. Federal Reserve's suggestion of a rate cut is also burdensome to the Bank of Korea.

These external variables are widely expected to freeze interest rates, but there may be room for a cut if next year's growth forecast falls to around 1%.

There is no disagreement that the economic growth rate makes the forecast announced in August.

It is expected to lower its previous forecast, which was 2.4% this year and 2.1% next year, to around 2.2% and 2%, respectively.