Bank of Korea defies expectations of 0.25% rate cut
- Bank of Korea avoids rate cut, holds benchmark rate at 1.25%.
- USD/KRW rises after the announcements.
- Coronavirus headlines seem to keep the driver's seat.
Early on Thursday, Bank of Korea conveys its monetary policy decision for February month. The South Korean central bank surprised global markets by defying the calls of a 0.25% rate cut while holding the benchmark rate unchanged at 1.0%.
“Sixteen of 26 analysts surveyed by Reuters predicted the Bank of Korea’s (BOK) seven-member board would cut the policy rate to 1.00% at its February meeting in a pre-emptive move,” said Reuters before the meeting.
Following the decision, USD/KRW rises to the intra-day high of 1,216.42 as news concerning coronavirus (COVID-19) crossed wires.
Among them, Yonhap’s confirmation that the US and South Korea have postponed the joint military drills and an addition to 334 COVID-19 cases to total 1,595 grabbed major attention.
That said, the market's risk-tone remains heavy with the S&P 500 Futures declining 0.86% to 3,084 and the US 10-year treasury yields testing 1.32% mark.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
