Halister News

(Bloomberg) -- BOK may hold benchmark rate while taking dovish stance after assessing high levels of household debt, impact of recent rise in oil price on inflation, and data indicating slowing growth, Bloomberg strategist David Finnerty writes.

• 7-day repo rate to be left at 1.50% according to 11 economists in Bloomberg survey; seven predict 25 bps cut to 1.25%; decision due tomorrow
• At last meeting in Feb., BOK said domestic economy would continue recovery, though uncertainties surrounding growth path had increased
• Since then, data signaled a weakening economy:
  • Feb. consumer confidence fell to 98, lowest level since June
  • Jan. industrial production dropped 1.8% m/m seasonally adjusted, lowest reading since Jan. 2015
  • Feb. exports fell 12.2%, extending run of y/y declines
• Household debt continues to rise, and may be spurred higher by rate cuts; Brent crude also near $40/bbl, signaling price may have bottomed, which could lead to CPI moving higher
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own.