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.

This week in monetary policy: China, Ghana, Israel, Paraguay, Nigeria, Lesotho, New Zealand, Zambia, Guatemala, South Korea, Sri Lanka & Sweden

    This week - November 22 through November 27 - central banks from 12 countries or jurisdictions are scheduled to decide on monetary policy: China, Ghana, Israel, Paraguay, Nigeria, Lesotho, New Zealand, Zambia, Guatemala, South Korea, Sri Lanka and Sweden.

     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 47
NOV 22 - NOV 27, 2021
CHINA	22-Nov	3.85%	9:30	0	0	3.85%	EM
GHANA	22-Nov	13.50%		0	-100	14.50%	FM
ISRAEL	22-Nov	0.10%	16:00	0	0	0.10%	DM
PARAGUAY	22-Nov	2.75%		125	200	0.75%
NIGERIA	23-Nov	11.50%		0	0	11.50%	FM
LESOTHO	23-Nov	3.50%		0	0	3.50%
NEW ZEALAND	24-Nov	0.50%	14:00	25	25	0.25%	DM
ZAMBIA	24-Nov	8.50%	10:00	0	50	8.00%
GUATEMALA	24-Nov	1.75%		0	0	1.75%
SOUTH KOREA	25-Nov	0.75%		0	25	0.50%	EM
SRI LANKA	25-Nov	5.00%	7:30	0	50	4.50%	FM
SWEDEN	25-Nov	0.00%	9:30	0	0	0.00%	DM

 
    www.CentralBankNews.info

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.

UPDATED-This week in monetary policy: South Korea, Morocco, Chile, Singapore, Sri Lanka, and Uganda

     (Following item is updated with Monetary Authority of Singapore (MAS))

     This week - October 11 through October 16 - central banks from 6 countries or jurisdictions are scheduled to decide on monetary policy: South Korea, Morocco, Chile, Singapore, Sri Lanka and Uganda.

     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 41
OCT 11 - OCT 16, 2021
SOUTH KOREA	12-Oct	0.75%		25	25	0.50%	EM
MOROCCO	13-Oct	1.50%		0	0	1.50%	FM
CHILE	13-Oct	1.50%	18:00	75	100	0.50%	EM
SINGAPORE	14-Oct	N/A	8:00	N/A	N/A	N/A	DM
SRI LANKA	14-Oct	5.00%	7:30	50	50	4.50%	FM
UGANDA	14-Oct	6.50%		0	-50	7.00%

  

    www.CentralBankNews.info

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.

This week in monetary policy: New Zealand, Turkey, Canada, Chile, South Korea and Japan

     This week - July 12 through July 17 - central banks from 6 countries or jurisdictions are scheduled to decide on monetary policy: New Zealand, Turkey, Canada, Chile, South Korea and Japan.

     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 28
JUL 12- JUL 17, 2021
NEW ZEALAND	14-Jul	0.25%	14:00	0	0	0.25%	DM
TURKEY	14-Jul	19.00%	14:00	0	200	8.25%	EM
CANADA	14-Jul	0.25%	10:00	0	0	0.25%	DM
CHILE	14-Jul	0.50%	18:00	0	0	0.50%	EM
SOUTH KOREA	15-Jul	0.50%		0	0	0.50%	EM
JAPAN	16-Jul	-0.10%		0	0	-0.10%	DM

 
    www.CentralBankNews.info

UPDATED-This week in monetary policy: Ghana, Lesotho, Paraguay, Indonesia, Hungary, Nigeria, New Zealand, Kenya, Guatemala, South Korea, Pakistan & Angola

    (Following item is updated after the National Bank of the Kyrgyz Republic announced on its website the next decision on its discount rate would be taken on May 31 and not May 24, as originally scheduled.)

    This week - May 24 through May 29 - central banks from 12 countries or jurisdictions are scheduled to decide on monetary policy: Ghana, Lesotho, Paraguay, Indonesia, Hungary, Nigeria, New Zealand, Kenya, Guatemala, South Korea, Pakistan and Angola.

     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 21
MAY 24 - MAY 29, 2021
GHANA	24-May	14.50%		0	0	14.50%	FM
LESOTHO	24-May	3.50%		0	0	3.75%
PARAGUAY	24-May	0.75%		0	0	1.25%
INDONESIA	25-May	3.50%		0	-25	4.50%	EM
HUNGARY	25-May	0.60%		0	0	0.90%	EM
NIGERIA	25-May	11.50%		0	0	12.50%	FM
NEW ZEALAND	26-May	0.25%	14:00	0	0	0.25%	DM
KENYA	26-May	7.00%		0	0	7.00%	FM
GUATEMALA	26-May	1.75%		0	0	2.00%
SOUTH KOREA	27-May	0.50%		0	0	0.50%	EM
PAKISTAN	28-May	7.00%		0	0	8.00%	EM
ANGOLA	28-May	15.50%		0	0	15.50%

 

 

    www.CentralBankNews.info

This week in monetary policy: Ghana, Lesotho, Paraguay, Kyrgyzstan, Indonesia, Hungary, Nigeria, New Zealand, Kenya, Guatemala, South Korea, Pakistan & Angola

      This week - May 24 through May 29 - central banks from 13 countries or jurisdictions are scheduled to decide on monetary policy: Ghana, Lesotho, Paraguay, Kyrgyz Republic, Indonesia, Hungary, Nigeria, New Zealand, Kenya, Guatemala, South Korea, Pakistan and Angola.

     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 21
MAY 24 - MAY 29, 2021
GHANA	24-May	14.50%		0	0	14.50%	FM
LESOTHO	24-May	3.50%		0	0	3.75%
PARAGUAY	24-May	0.75%		0	0	1.25%
KYRGYZSTAN	24-May	6.50%		100	150	5.00%
INDONESIA	25-May	3.50%		0	-25	4.50%	EM
HUNGARY	25-May	0.60%		0	0	0.90%	EM
NIGERIA	25-May	11.50%		0	0	12.50%	FM
NEW ZEALAND	26-May	0.25%	14:00	0	0	0.25%	DM
KENYA	26-May	7.00%		0	0	7.00%	FM
GUATEMALA	26-May	1.75%		0	0	2.00%
SOUTH KOREA	27-May	0.50%		0	0	0.50%	EM
PAKISTAN	28-May	7.00%		0	0	8.00%	EM
ANGOLA	28-May	15.50%		0	0	15.50%

    www.CentralBankNews.info