VOT Research Desk
The Bank of Korea (BoK) resorted to a lower rate hike in November, raising the benchmark base rate by 25 basis points (bps) to 3.25%, down from a 50bps hike in October.
This is due to the Fed becoming less hawkish, credit market stress, increased growth risks, and a more stable KRW.
The Bank of Korea maintained its GDP growth prediction for 2022 at 2.6%, but reduced it to 1.7% from 2.1% for 2023.
The central bank also reduced its CPI inflation predictions for 2022 and 2023 by 0.1% point, to 5.1% and 3.6%, respectively.
However, inflation is likely to stay elevated in the near future around 5%. This is the final meeting of the BoK for 2022, and the next meeting will be on January 23rd, where we shall now discuss expect the central bank to raise rates by 25 basis points to 3.50% before going on hold until 2023.
