South Korea raises rate 3rd time, inflation seen higher

      South Korea's central bank raised its monetary policy rate for the third time, as widely expected, and said it will continue to "appropriately adjust the degree of monetary policy accommodation as the Korean economy is expected to continue its sound growth and inflation to run above the target level for a considerable time, despite underlying uncertainties over the virus."
      The Bank of Korea (BOK) raised its base rate by another 25 basis points to 1.25 percent and has now raised it by 75 basis points following rate hikes in August, November and today.

      In November the central bank's monetary board also said it would appropriately adjust the degree of policy accommodation as the economy is expected to continue growing and inflation to run above the bank's target of 2.0 percent.
      Deciding when to tighten monetary policy again, BOK said it would take into account the impact of COVID-19 on growth and inflation, the risk of a buildup of financial imbalances, the effect of rate increases and changes in monetary policy in other countries.

     Today's rate hike was widely expected as the bank's governor, Lee Ju-yeol, on Dec. 24 and Dec. 31 said interest rates would need to be adjusted in line with improving economic conditions.

      "The Korean economy has continued to recover despite the resurgence of COVID-19," BOK said today, adding it still projects growth this year of around 3 percent, as forecast in November.

      South Korea's gross domestic product slowed in the third quarter of 2021 to annual growth of 4.0 percent from 6.0 percent in the second quarter, with growth in 2021 estimated around 4.0 percent.

      A tightening of pandemic-related restrictions had moderated growth in private consumption but exports had remained buoyant due to robust global demand, BOK said, adding facilities investment had slowed due to global supply constraints.

      "Going forward, the economy is likely to sustain its sound growth, as the recovery of private consumption is forecast to pick up again while exports are expected to continue their solid trend of increase," BOK said.

      Inflation in South Korea has topped 3 percent in the last three months - it eased slightly to 3.7 percent in December from 3.8 percent in November - and BOK said it now expects inflation to continue to run in the 3.0 percent range "for a considerable time," exceeding the path it projected in November.

     In November BOK raised its forecast for 2021 inflation to 2.3 percent and expected inflation to remain at that level in the first half of 2022 before easing in the second half of the year to average 2 percent.

     BOK now expects headline inflation to be above 2 percent this year while core inflation is expected to run "considerably" above 2 percent.

This week in monetary policy: Romania, Serbia and South Korea

     This week - January 10 through January 15 - central banks from 3 countries or jurisdictions are scheduled to decide on monetary policy: Romania, Serbia and South Korea.

     Following table includes the name of the country, the date of the next policy decision, the current policy rate, the local time a policy decision is announced, the result of the last policy decision, the change in the policy rate year to date, and the rate one year ago.
    The table is updated when the latest decisions are announced and can always be accessed by clicking on This Week.

WEEK 2
JAN 10 - JAN 15, 2022
ROMANIA	10-Jan	1.75%		0	0	1.25%	FM
SERBIA	13-Jan	1.00%	12:00	0	0	1.00%	FM
SOUTH KOREA	14-Jan	1.00%		0	0	0.50%	EM

 
    www.CentralBankNews.info

South Korea raises rate 2nd time and sees sound growth

      South Korea's central bank raised its benchmark interest rate for the second time this year and signaled it will continue to raise rates, saying it would "appropriately adjust the degree of monetary policy accommodation as the Korean economy is expected to continue its sound growth and inflation to run above the target level for a considerable time, despite underlying uncertainties over the virus."
      But the Bank of Korea (BOK) also said the time line for further rate hikes would depend on the pace of economic growth and inflation along with the risk of a buildup of financial imbalances and the changes in monetary policy in major countries.

     BOK raised its base rate by another 25 basis points to 1.0 percent and has now raised it 50 points this year following an earlier rate hike in August, the bank's first rate hike since November 2018.

     Today's rate hike was widely expected by financial markets after the country's inflation rate rose to 3.2 percent in October from 2.5 percent, pushing up inflation expectations to the upper 2 percent level and above the central bank's 2.0 percent target.

     Looking ahead, BOK forecast consumer price inflation will be higher than it forecast in August and exceed its target "considerably" before it declines to around 2 percent in 2022.

     BOK raised its forecast for inflation this year to 2.3 percent and for inflation to remain at that a level in the first half of 2022 before easing in the second half for an average of 2.0 percent as inflationary pressures on the demand side are expected to gradually expand due to the economic recovery amid a sharp rise in global oil prices.

     BOK said the country's economy had continued its recovery and maintained its forecast for economic growth this year of around 4.0 percent and around 3.0 percent in 2022.

South Korea holds rate, to 'appropriately' adjust policy

    South Korea's central bank left its base rate steady, as widely expected, and said it would "appropriately adjust the degree of monetary policy accommodation as the Korean economy is expected to continue its sound ground and inflation to run above 2% for some time, despite ongoing uncertainties over the virus."
     Today's guidance by the Bank of Korea's (BOK) monetary policy board appears slightly more dovish than its guidance from August when it said it would "gradually" adjust the degree of monetary policy accommodation.

      BOK left its base rate steady at 0.75 percent after raising it in August by 25 basis points in the first rate hikes since November 2018.
     As in its policy statement in August, BOK said it would "judge when to further adjust the degree of accommodation" while taking into account the pace of growth and inflation, the build-up of financial imbalances, monetary policy changes in major countries and COVID-19.
     South Korea's inflation rate has remained above BOK'S 2.0 percent target since April but eased in August to 2.5 percent from 2.6 percent in the previous two months. 
     "Looking ahead, it is forecast that consumer price inflation will run at the mid-2% level for some time, exceeding the path projected in August before declining somewhat," the bank said, adding core inflation is expected to rise to the upper 1 percent level from 1.3 percent in August.

      The pace of growth of South Korea's economy has been slowing in recent quarters - it grew 0.8 percent in the second quarter, down from first quarter growth of 1.7 percent - but BOK confirmed it still expects growth this year of around 4.0 percent, as in August.

South Korea raises rate and says will tighten further

      South Korea's central bank raised its key interest rate for the first time in almost three years and said it "will gradually adjust the degree of monetary policy accommodation as the Korean economy is expected to continue its sound growth and inflation to run above 2% for some time, despite ongoing uncertainties over the virus."
     The Bank of Korea (BOK) raised its base rate by 25 basis points to 0.75 percent, the first rate hike since November 2018, but the level remains at historic lows, encouraging households to take on debt and triggering concern among authorities over financial imbalances.

     Today's rate hike, which was expected by about half of economists' recently surveyed, begins to unwind last year's two rate cuts of 75 basis points in response to the COVID-19 pandemic.

     Prior to the global outbreak of the virus, BOK was already in a monetary easing cycle that began in June 2019 in response to slowing global growth with the rate cut twice that year by 50 basis points.

     The rate is now 1 percentage point below the level in May 2019 when the last easing cycle began.

     In its statement, the bank's board said the decision to tighten is policy stance again would depend on how the pandemic evolves along with the pace of economic growth, inflation, the risk of a buildup in financial imbalances and policy changes in major countries.

    "The Korean economy has continued its sound recovery," BOK said, adding that while private consumption has slowed somewhat due to the resurgence of the virus, exports have sustained their buoyancy and investment in facilities has been robust.

     South Korea's economy grew an annual 5.9 percent in the second quarter of this year, up from 1.9 percent in the first quarter for the fastest growth in a decade, boosted by private consumption, government spending and exports.

     The government last month also passed its second-largest supplementary budget of 34.9 trillion won to support economic activity during the latest wave of the pandemic. The budget includes a 250,000 won cash handout to cover most people in the country.

     South Korea's inflation rate has remained above BOK's 2.0 percent target since April and rose to a faster-than-expected 2.6 percent in July from 2.4 percent.

     Following last month's board meeting, BOK Governor Lee Ju-yeol made it clear a rate increase would be debated at today's board meeting as a way to deal with financial imbalances.

     Lee also said there was no need to delay a rate hike if the economy continues to recover.

     "Going forward, the economy is likely to continue its recovery as private consumption is forecast to improve gradually, affected by the expansion of vaccinations and the execution of a supplementary budget, while exports and investment are expected to sustain their buoyancy," the bank said today.

     BOK confirmed its forecast from May the economy would grow around 4.0 percent this year but raised its outlook for headline inflation to rise to a "lower-2% level this year" from the May forecast of 1.8 percent.

UPDATE - South Korea cuts rate 2nd time 2020, keeps easy stance

     (Following item in update with forecasts from BOK's May economic outlook)

     South Korea's central bank cut its base rate for the second time this year, as expected, and said it would maintain an accommodative monetary policy stance as "economic growth is expected to be sluggish and inflationary pressures on the demand-side are forecast to remain weak due to the COVID-19 pandemic."
     The Bank of Korea (BOK) cut its base rate by another 25 basis points to 0.50 percent and has now cut it 75 points this year following a 50-point cut in March.
      Since June 2019, when BOK began easing in response to sluggish economic growth from exports that were hit by the U.S.-China trade war, the rate has been cut 125 basis points.
      BOK didn't show its hand regarding future policy decisions, merely saying it would continue to conduct monetary policy to support the economy and stabilize consumer price inflation at its target level while paying attention to financial stability.
       Although South Korea has been relatively successful in controlling the outbreak of the coronavirus, its economy has still taken a major hit as exports have fallen significantly and consumption remains sluggish.
      "Economic growth in Korea has slowed considerably," BOK said, adding labour market conditions have worsened with a sharp decline in the number of employed, especially in the services sector, and a recovery in facilities investment has been subdued.
      "The Board expects that domestic economic growth will remain sluggish for some time due to the impact of the COVID-19 pandemic," BOK said, forecasting that gross domestic product growth will be around zero percent this year, sharply down from its February forecast of 2.1 percent.
      It added uncertainties around the future growth path are very high.
      In its May economic outlook, BOK said GDP was projected to decline 0.2 percent on average this year, with a decline of 0.5 percent in the first half and then growth of 0.1 percent in the second half.
      Exports are seen falling 2.1 percent for the full year, with a 3.7 percent drop in the second half of the year, and private consumption seen down 1.4 percent for the year.
      In 2021 BOK sees GDP bouncing back to growth of 3.1 percent as exports expand 3.2 percent and private consumption rises 3.1 percent.
      In the first quarter of this year, South Korea's GDP contracted by 1.4 percent from the previous quarter for annual growth of 1.3 percent, down from 2.3 percent in the fourth quarter of 2019.
      The global economy is estimated to contract 3.4 percent this year compared to growth of 2.9 percent in 2019, and then expand 4.8 percent in 2021, helped by a 6.7 percent rise in world trade.
      Inflation has also slowed sharply with headline inflation falling to only 0.1 percent in April from 1.0 percent in March, well below its 2.0 percent target.
      BOK forecast consumer prices would rise 0.3 percent this year and then 1.1 percent in 2021, while core inflation, which excludes food and energy, would rise 0.4 percent this year and then 0.9 percent in 2021, with the fall in oil prices and weak demand holding back inflation.
   

UPDATE-South Korea holds rate despite hit to economy from virus

     (Following item has been updated with February Economic Outlook)
   
     South Korea's central bank defied expectations and kept its base rate at 1.25 percent while acknowledging domestic and global economic growth has weakened and uncertainties about future growth are high following the outbreak of the coronavirus (COVID-19).
     The Bank of Korea (BOK), which has maintained its rate since October 2019, reiterated its guidance from last month that it would maintain its accommodative monetary policy stance in light of moderate growth and low inflationary pressures.
     "In this process it will judge whether to adjust the degree of monetary policy accommodation, while thoroughly assessing the severity of the COVID-19 outbreak, its impact on the domestic economy, and changes in financial stability including household debt growth," BOK said.
     BOK said consumption in South Korea, with the largest coronavirus outbreak outside China, had slowed from the spread of the virus while sluggishness in facilities investment had eased and employment conditions had continued to improve.
     BOK lowered its forecast for growth this year to 2.1 percent from its forecast of 2.3 percent in November, adding "uncertainties regarding the future growth path are high due to the impact of the COVID-19 outbreak."
      Hit by the global economic slowdown and uncertainty from the trade conflict between the U.S. and China, South Korea's economy grew only 2.0 percent in 2019, the slowest in 10 years,
      In June last year BOK switched tack when it cut its rate only 8 months after raising it and then cut it another time in October for a total easing in 2019 of 50 basis points.
      BOK expects the virus outbreak to temporarily slow economic growth as consumption is hit but growth is expected to recover as consumption rebounds, and exports and investments rise amid the continued fiscal expansion.
     Growth in the first half of this year is seen slowing to 2.0 percent from November's forecast of 2.2 percent and then recover to 2.2 percent in the second half, slightly below the earlier 2.3 percent forecast.
     BOK slashed its forecast for private consumption in the first half to 1.1 percent from an earlier 1.9 percent but raised it to 2.6 percent in the second half from 2.2 percent. For the full 2020 year private consumption is seen rising 1.9 percent, down from November's forecast of 2.2 percent.
     For 2021 South Korea's economy is still seen expanding 2.4 percent.
     BOK also lowered its forecast for global growth due to slower growth in China, with trade taking a hit in the first quarter from production disruptions and a contraction in global tourism.
     Global growth is forecast to slow to 2.8 percent in the first half of 2020, down from 3.2 percent previously projected, with China slowing to 4.9 percent from an earlier 5.9 percent.
     In the second half of this year world growth is expected to pick up to 3.2 percent as China's economy rebounds and expands 6.1 percent, and for the full year the global economy is seen growing by 3.0 percent, still down from November's forecast of 3.2 percent.
     Like stock markets around the world, South Korea's Kospi index has been hit hard in the last week and is down 8 percent since Feb. 17 while the rise in the safe-haven U.S. dollar has pushed down South Korea's won by 4.8 percent this year to 1,216 per U.S. dollar today.
     "Looking ahead, the Board sees global economic growth and the global financial markets as likely to be affected largely by the severity of the COVID-19 outbreak and developments in global trade protectionism and geopolitical risks," BOK said.
      South Korea's inflation rate has bounced back in the last three months after zero or negative from August through October, and in January it rose to 1.5 percent from 0.7 percent in December.
     BOK said it expects consumer price inflation to run at the lower 1.0 percent level and then fall slightly to around 1.0 percent during the year while core inflation will be in the upper 0 percent level.
     BOK targets inflation of 2.0 percent.

South Korea keeps rate and easy monetary policy stance

    South Korea's central bank left its base rate steady at 1.25 percent and said it would maintain its accommodative monetary policy stance as economic growth is expected to be moderate, restraining any upward pressure on inflation.
     The Bank of Korea (BOK), which cut its rate twice last year, most recently in October,  also reiterated its guidance from November that it is still ready to "adjust the degree of monetary policy accommodation" while it carefully monitors global trade disputes, the economies of major countries, household debt and how geopolitical risks affect the domestic economy.
     BOK said the pace of global economic growth had continued to slow but "sluggishness in the domestic economy has eased somewhat" as investment in facilities had risen slightly and consumption growth had expanded while investment in construction continued to decline.
     BOK said South Korea's economy is forecast to grow at the "lower-2% level" this year, as it projected in November, as the sluggishness in exports and facilities investment gradually eases and consumption rises while construction investment remains depressed.
     In 2019 South Korea's economy is estimated to have expanded 2.0 percent and in November BOK forecast growth of 2.3 percent in 2020.
     Two of the monetary policy board's seven members dissented, and voted for a rate cut. The terms of four board members expire in April.

South Korea holds rate, easy stance, still ready to adjust

    South Korea's central bank left its base rate steady at 1.25 percent and said it would maintain its accommodative monetary policy stance as domestic economic growth is expected to be moderate and inflation low, confirming it is still willing to "judge whether to adjust the degree of monetary policy accommodation."
     The Bank of Korea (BOK), which has cut its rate twice this year by a total of 50 basis points in October and July, said the pace of domestic economic growth has remained slow but next year the  sluggishness in exports and facilities investment is expected to ease and consumption growth to rise moderately although the adjustment in construction investment will continue.
     BOK lowered its forecast for 2019 growth to around 2.0 percent from July's forecast of 2.2 percent  and forecast 2.3 percent growth in 2020, down from 2.5 percent previously forecast. In 2018 the economy grew 2.7 percent.
    "As it is expected that domestic economic growth will be moderate and it is forecast that inflationary pressures on the demand side will remain at a low level, the Board will maintain its accommodative monetary policy stance," BOK said.
    Whether to adjust the degree of accommodation, BOK said this would be decided in light of developments in U.S.-China trade talks, the economic and monetary policies of major countries, the rise in household debt, along with geopolitical risks and their impact on the domestic economy and financial stability.
     South Korea's economy, considered a bellwether for the global economy and trade due to its reliance on exports, grew 2.0 percent annually in the third and second quarters of this year.
     Last month BOK Governor Lee Ju-yeol said higher tariffs and uncertainties from the U.S.-China trade war had probably cut South Korea's growth by 0.4 percentage points in 2019.
     Consumer price inflation rose slightly in October to zero percent from a decline of 0.4 percent in September and BOK forecast headline inflation would rise moderately to around 1.0 percent in 2020 while core inflation, which excludes food and energy, would be in the upper zero percent level.

South Korea cuts rate 2nd time and will keep easy stance

    South Korea's central bank lowered its benchmark base rate for the second time this year, saying it was maintaining an accommodative monetary policy stance due to moderate domestic growth and low inflation, and would judge whether to adjust the degree of monetary policy accommodation while observing the effect of two rate cuts and any changes to economic and financial stability.
    As expected, the Bank of Korea (BOK) cut its base rate by another 25 basis points to 1.25 percent and has now cut it by 50 points this year.
    South Korea's economy, closely tied to the health of the global economy due to its exports, has slowed this year due to weaker domestic growth and BOK said the pace of the global economic growth has continued to slow as trade has contracted.
     "Going forward, the Board expects domestic economic growth to fall below the July projection, owing chiefly to the continued US-China trade dispute and heightened geopolitical risks," BOK said.
     In July BOK lowered its 2019 growth forecast to 2.2 percent from 2.5 percent and late last month Governor Lee-Ju-yeol said growth was likely to be lower than this forecast.
     A new forecast will be released next month.
     South Korea's economy grew by an annual 2.0 percent in the second quarter of this year, up from 1.7 percent in the first quarter.
     Inflation turned negative in September, falling 0.4 percent after a flat reading in August, and BOK said inflation will fall short of the path projected in July and fluctuate for some time around zero and then rise to the 1.0 percent range from next year.
     In July BOK forecast inflation would fluctuate below 1.0 percent for some time and then be at the low to mid-1.0 percent level in 2020.
     BOK targets inflation of 2.0 percent.

This week in monetary policy: Singapore and South Korea

    This week - October 13 through October 17 - central banks from 2 countries or jurisdictions are scheduled to decide on monetary policy: Singapore and South Korea.

    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the result of the last policy decision, the change in the policy rate year to date, and the rate one year ago.

    The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.

WEEK 42
OCT 13 - OCT  19, 2019:
SINGAPORE	14-Oct	N/A			N/A	DM
SOUTH KOREA	17-Oct	1.50%	0	-25	1.50%	EM

    www.CentralBankNews.info

South Korea cuts rate 25 bps, to keep easy policy stance

     South Korea's central bank cut its benchmark base rate by 25 basis points to 1.50 percent and said it will maintain an accommodative monetary policy stance as economic growth is expected to be moderate and inflationary pressures will remain low in response to a slowing global economy from trade disputes between the U.S. and China.
     It is Bank of Korea's (BOK) first rate cut since June 2016 and reverses the 25-point rate hike in November 2018, which was partly due to concern over rising household debt but also to give the central bank some more room to deal with any future economic downturns.
     The rate cut comes after recent data showed a large drop in South Korean exports as the global economy cools, and BOK lowered its forecast for 2019 economic growth to around 2.2 percent from April's forecast of 2.5 percent, which had been cut from an earlier 2.6 percent.
    South Korea's won fell 0.3 percent immediately after the rate cut to 1,182.6 per U.S. dollar, pushing this year's depreciation to 5.5 percent, before settling slightly higher at 1,178.5.
     "The Board (of BOK) judges that the pace of domestic economic growth has slowed as construction investment has continued undergoing an adjustment and the slowdowns in exports and facilities investment have deepened, although consumption has continued to grow moderately," BOK said.
     South Korea's gross domestic product slowed to annual growth of only 1.7 percent in the first quarter of this year, down from 2.9 percent in the fourth quarter of last year, with exports in the second quarter down 8.4 percent after a 8.5 percent fall in the first quarter.
     BOK expects the decline in construction investment to continue as exports and facilities investment also recover later than it had expected while consumption will continue to grow.
     South Korea's inflation rate has remained well below its 2.0 percent target - it was steady at 0.7 percent in May and June - and BOK expects inflation to remain below the path it predicted in April.
     BOK forecast headline inflation would fluctuate below 1.0 percent for some time and then run at the low to mid-1.0 percent level in 2020.

South Korea holds rate but lowers growth expectations

     South Korea's central bank left its base rate unchanged at 1.75 percent and reiterated that it will maintain an accommodative monetary policy stance as inflationary pressures are not expected to be high and and economic growth will not diverge significantly from its potential level.
      But the Bank of Korea (BOK), which has raised its rate twice since November 2017 - most recently in November last year - also said it expects the country's economic growth to "fall slightly short" of its forecast from October when it forecast 2019 growth of 2.7 percent.
      While BOK said South Korea's economy was expanding around its potential level, it acknowledged the pace of global growth has slowed, with future growth affected by the spread of trade protectionism, the pace of monetary policy normalization in advanced economies and how Britain's departure from the European Union evolves.
      South Korea's Gross domestic product grew by a an estimated 1.0 percent quarter on quarter in the fourth quarter of last year and by 3.1 percent year on year, for annual growth of 2.7 for the full year, the slowest growth since 2012 and down from 3.1 percent in 2017.
      BOK said increases in consumption and exports had been sustained while "adjustments in facilities and construction investment have continued."
      South Korea's economy is seen a bellwether of the state of the global economy due to its strong export businesses.
      Illustrating softer global growth and the fallout from the trade conflict between the U.S. and China, South Korea's exports fell 1.2 percent in December, sharply down from estimates of a 3.3 percent rise, and the first decline in three months, with semiconductor sales down 8.3 percent.
      South Korea's won has been relatively stable since July last year but rose in response to BOK's statement to trade at 1,126 to the U.S. dollar, down 1.1 percent this year.
       Inflation fell to 1.3 percent in December from 2.0 percent in November and BOK forecast that inflation will fluctuate around the 1.0 percent level for some time before rising in the second half of the year.
      BOK targets inflation of 2.0 percent.

South Korea maintains rate as growth forecast lowered

      South Korea's central bank left its base rate steady at 1.50 percent, as expected, and said it would maintain its accommodative monetary policy stance as inflationary pressures from demand are not high and economic growth is below expectations.
     The Bank of Korea (BOK), which in November last year raised its rate for the first time since June 2011, repeated its guidance from August that it would continue to "judge whether it is necessary to adjust its accommodative monetary policy stance, while closely checking future economic growth and inflation trends."
      While most analysts had expected the BOK to retain its base rate today, many were expecting the central bank to signal that it may raise its rate in November as inflation picked up speed in September.            
     But economic growth in export-dependent South Korea is expected to be weaker than forecast in July with employment conditions sluggish and investment expected to slow while exports should sustain their momentum due to the continued buoyancy of the global economy.
     However, BOK cautioned global growth is likely to be affected by spreading trade protectionism, the normalization of monetary policy in advanced economies and U.S. economic policy.
      "Going forward the Board expects domestic economic growth to be somewhat below the path projected in July, but to sustain a rate that does not diverge significantly from its potential level," the BOK said.
    South Korea's gross domestic product has expanded 2.8 year-on-year in the last three quarters but in an update to its economic outlook it lowered the forecast for growth this year to 2.7 percent from the July forecast of 2.9 percent.
     Next year the economy is also forecast to expand by 2.7 percent.
     Inflation rose to 1.9 percent in September from 1.4 percent in August due to higher agricultural prices and the ending of a temporary cut in electricity fees.
     On average BOK forecast inflation of 1.6 percent this year and 1.7 percent in 2019, below its 2.0 percent target.

South Korea maintains rate and accommodative stance

      South Korea's central bank kept is base rate steady at 1.50 percent, as expected, and poured cold water on any expectations that it is getting closer to another rate hike by reiterating its guidance from last month that it will maintain its accommodative policy stance as inflationary pressures from demand "will not be high for the time being."
      The Bank of Korea (BOK), which in November last year raised its rate for the first time since June 2011, also confirmed that it still expects inflation to slowly rise from the low to mid-single digits and gradually approach its 2.0 percent target level from the second half of 2018.
      South Korea's inflation rate eased to 1.0 percent in January from 1.5 percent in December, with the BOK last month forecasting that inflation would average 1.7 percent this year then rise to 2.0 percent in 2019.
      Next year inflation is seen close to 2.0 percent target as demand side pressures start to rise in synch with the domestic economy. Core inflation, which excludes energy and groceries, is forecast at 1.8 percent this year and 2.0 percent in 2019.
      South Korea's economy is showing solid expansion with exports rising and consumption and investments showing favorable changes, BOK said, adding construction investment had fallen.
     Gross Domestic Product grew by an annual 3.0 percent in the fourth quarter of last year for annual growth of 3.1 percent, up from 2016's 2.8 percent.
       The BOK in January raised its 2018 growth forecast to 3.0 percent from 2.9 percent, with its exports continuing to benefit from the global recovery while private consumption is also expected to improve from last year.
       For 2019 the BOK expects 2.9 percent growth, close to the economy's potential growth rate.

       South Korea's won strengthened steadily last year but has gave up some of its gains in February. Today the won was trading at 1,070.2 to the U.S. dollar, down 0.4 percent this year.

This week in monetary policy: Kazakhstan, Canada, South Korea, Indonesia, Turkey & South Africa

    This week (January 14 through January 20) central banks from 6 countries or jurisdictions are scheduled to decide on monetary policy: Kazakhstan, Canada, South Korea, Indonesia, Turkey and South Africa.

    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the result of the last policy decision, the change in the policy rate year to date, the rate one year ago, and the country’s MSCI classification.

    The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.

WEEK 3
JAN 14- JAN 20, 2018:
COUNTRY	DATE	RATE	LATEST	YTD	1 YR AGO	MSCI
KAZAKHSTAN	15-Jan	10.25%	0	0	12.00%	FM
CANADA	17-Jan	1.00%	0	0	0.50%	DM
SOUTH KOREA	18-Jan	1.50%	25	0	1.25%	EM
INDONESIA	18-Jan	4.25%	0	0	4.75%	EM
TURKEY	18-Jan	8.00%	0	0	8.00%	EM
SOUTH AFRICA	18-Jan	6.75%	0	0	7.00%	EM

    www.CentralBankNews.info

UPDATE - 2018 Global Central Bank Monetary Policy Calendar

     (Following item is updated with the central banks of Indonesia, Israel, Kyrgyz Republic, South Africa, South Korea and Turkey)

     Herewith the 2018 calendar for meetings by central bank committees that decide monetary policy.
    This following table includes scheduled meetings for more than 35 of the world's central banks. In the event that meetings by monetary policy committees take place over several days, the date listed below is for the final day of the meetings when decisions are normally announced.
    Central Bank News updates the calendar regularly as some central banks have yet to release their meeting schedule for 2018. Other central banks only release tentative schedules and then finalize their calendar as the meeting nears.

    The latest version of the calendar can always be accessed by clicking here.

    Work is underway to expand the number of central banks covered, including expanding the existing inflation targets table, and global interest rates table. You may replicate the tables in part or in full only if you link to Central Bank News.

DATE	FX CODE	COUNTRY	CENTRAL BANK
JANUARY
8-Jan	RON	Romania	National Bank of Romania
9-Jan	ARS	Argentina	Central Bank of Argentina
10-Jan	ILS	Israel	Bank of Israel
10-Jan	PLN	Poland	National Bank of Poland
11-Jan	RSD	Serbia	National Bank of Serbia
11-Jan	PEN	Peru	Central Reserve Bank of Peru
15-Jan	KZT	Kazakhstan	National Bank of Kazakhstan
17-Jan	CAD	Canada	Bank of Canada
18-Jan	KRW	South Korea	Bank of Korea
18-Jan	IDR	Indonesia	Bank Indonesia
18-Jan	TRY	Turkey	Central Bank of Republic of Turkey
18-Jan	ZAR	South Africa	South African Reserve Bank
22-Jan	GHS	Ghana	Bank of Ghana
23-Jan	JPY	Japan	Bank of Japan
23-Jan	ARS	Argentina	Central Bank of Argentina
25-Jan	FJD	Fiji	Reserve Bank of Fiji
25-Jan	MYR	Malaysia	Central Bank of Malaysia
25-Jan	NOK	Norway	Norges Bank
25-Jan	UAH	Ukraine	National Bank of Ukraine
25-Jan	EUR	Euro area	European Central Bank
29-Jan	AOA	Angola	Bank of Angola
29-Jan	COP	Colombia	Central Bank of Colombia
30-Jan	HUF	Hungary	Central Bank of Hungary
30-Jan	MDL	Moldova	National Bank of Moldova
31-Jan	GEL	Georgia	National Bank of Georgia
31-Jan	BGN	Bulgaria	Bulgarian National Bank
31-Jan	USD	United States	Federal Reserve
31-Jan	DOP	Dominican Republic	Central Bank of the Dominican Rep.