"SC Group Head Predicts One Cut in Bank of Korea Base Rate This Year (Comprehensive)"

Eric Robertson SC Group Global Head Interview
Expecting Low Interest Rate Trends in Both the US and China
Bank of Korea Also Forecasted to Cut Rates Once in the First Half of This Year

Eric Robertson, Global Head of Global Macro Strategy and FXRC (Foreign Exchange, Interest Rates, Commodities) Research at Standard Chartered (SC) Group

[Asia Economy Reporter Kim Min-young] An executive from the headquarters of a foreign bank visiting Korea has predicted that the Bank of Korea will lower the base interest rate about once this year.

Eric Robertson, Global Head of Global Macro Strategy and FXRC (Foreign Exchange, Interest Rates, Commodities) Research at Standard Chartered (SC) Group, said in an exclusive interview with Asia Economy on the 17th, "I expect the Bank of Korea to cut the base interest rate once this year," adding, "The U.S. Federal Reserve (FED) is expected to lower rates next year, and China is also expected to maintain a low interest rate policy."

Meeting at the SC First Bank headquarters in Jongno-gu, Seoul, Eric Robertson, Global Head of SC Group, said, "The good news this year is that the global economy is stabilizing," and added, "The Korean economy has also entered a stabilization phase, but I believe this optimism will somewhat weaken in the second half of the year, so the Bank of Korea will likely lower rates once in the first half."

Eric Robertson, Global Head of Global Macro Strategy and FXRC (Foreign Exchange, Interest Rates, Commodities) Research at Standard Chartered (SC) Group. Photo by SC First Bank

On the morning of the interview, the Bank of Korea announced it would keep the base rate at 1.25%. Two members of the Monetary Policy Committee expressed minority opinions advocating for a rate cut, increasing the likelihood of a rate reduction within the year.

Eric Robertson visited Korea to attend the '2020 Global Research Briefing' hosted by SC First Bank for corporate clients. He is responsible for developing and executing major asset investment and trading strategies within the group. After earning a degree in economics from Princeton University, he worked at Deutsche Bank in Germany and Millennium Capital Partners in London, UK, before joining SC Group in 2014.

This is his seventh visit to Korea. He feels that the Korean economy and Korean investors are dynamic and very interested in events happening worldwide. He said, "I noticed that optimism among investors has increased this time," and evaluated, "Especially on a global scale, perceptions of investment have improved compared to six months or a year ago." He added, "Although Korean investors remain somewhat conservative, their risk-seeking tendencies have slightly increased."

Regarding the strong performance of developed country stock markets last year, he offered a unique perspective. He said, "The top 10 or so companies like Apple, Facebook, and Google led the U.S. stock market through share buybacks," analyzing, "The amount spent on share buybacks last year reached $800 billion, and over the past two years, share buybacks totaled $1.5 trillion."

He disagreed with the view that the sluggish Korean market was due to the U.S.-China trade war, stating, "The memory chip semiconductor market peaked in 2018 and then declined, and during this period, the Korean won weakened, which negatively affected the Korean stock market." He added, "With semiconductor companies' earnings improving, the economy is shifting toward stabilization this year."

Eric Robertson suggested reducing the proportion of developed country stocks and increasing bond holdings as this year's investment strategy. He said, "I maintain the view that the global economy is stabilizing, but this is a somewhat conservative perspective rather than optimistic," and predicted, "The economic growth rates of the U.S. and China are expected to be worse next year than this year, weakening market 'trust and confidence.'" He also proposed, "Since there is no inflation globally, it is advisable to reduce stock holdings and increase bonds, with preferred assets being U.S. Treasury bonds and bonds from Southeast Asian countries such as Indonesia, Malaysia, Singapore, and Thailand, where investment opportunities can be sought."

This content was produced with the assistance of AI translation services.