BOK’s Lee: Growth outlook assumes coronavirus outbreak won't last too long

Dhwani Mehta FXStreet

South Korean growth outlook assumes the coronavirus outbreak won't last too long, Bank of Korea (BOK), Governor Lee Ju-yeol said in a statement following the announcement of the central bank’s monetary policy decision on Thursday.

Key quotes

The biggest risk to S. Korea growth is coronavirus spread.

Needed to wait a little further to gauge impact from virus.

Thursday's rate decision was not unanimous.

Board member cCo dong-chul was dissenter to Thursday’s rate decision.

Board member Shin in-eok was dissenter to Thursday’s rate decision.

Previous two key rate reductions seem to be working.

Virus outbreak doesn’t seem to have impacted chip output just yet.

Consumption, tourism, retail sectors hit hardest from virus.

Q1 growth could be negative.

Have enough policy room to respond to growth risks if needed.

Need to prepare in case policy room to respond to growth risks disappear.

Can't say property market prices have been stabilized.

Govt's property market measures also has its limits.

Rate cuts doesn't necessarily follow decision to raise ceiling for BOK’s special loans.

USD/KRW keeps highs

USD/KRW consolidates the latest uptick to a daily high of 1,217.09 reached after the BOK’s surprise rates on-hold decision. The Korean won (KRW) failed to benefit from the unexpected status-quo, as rising coronavirus cases in the country continue to undermine the sentiment around the local currency.

USD/KRW rises by 0.20% to 1,214.55, at the time of writing.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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