JP Morgan "Bank of Korea May Raise Interest Rates in Q4 This Year"

[Asia Economy Reporter Jang Hyowon] Global investment bank (IB) JP Morgan forecasted on the 27th that the Bank of Korea may raise the base interest rate in the fourth quarter of this year.

The Monetary Policy Committee of the Bank of Korea kept the base interest rate steady at 0.5% per annum on the same day. Governor Lee Ju-yeol mentioned for the first time the possibility of a rate hike within the year depending on economic conditions.

Regarding this, JP Morgan explained, "Through upward revisions of growth rate and consumer price inflation forecasts, and the hawkish tone of the monetary policy direction statement, a more hawkish policy signal was sent compared to before."

They added, "A hawkish minority opinion appeared at the MPC meeting in the third quarter this year, and we expect a rate hike in the fourth quarter," and "The second rate hike will be brought forward from the previously expected fourth quarter of next year to the third quarter."

JP Morgan predicted that the timing of the rate hike is more likely to be November rather than October.

JP Morgan explained, "We previously expected the first rate hike to be in the first quarter of next year, but now there are signals that the MPC has started discussions on the timing of the rate hike, and economic indicators after the February meeting were better than expected."

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