South Korea central bank cuts policy rate to 1.25% as expected

[Seoul 16th Reuters]-The Bank of Korea (Central Bank) cut its policy rate from 1.50% to 1.25% on the 16th. The rate cut is as expected.

Central bank president Lee Joo-jool is scheduled to hold a press conference from 0220GMT (11:20 am Japan time).

The rate cut decision following the monetary easing in July coincided with the Reuters survey expectations for 31 analysts.

This is the second rate cut in the past three months.

Financial markets had little reaction to the central bank's decision. Investors are paying attention to the upcoming press conference of the central bank governor to determine future monetary policy.

"Don't expect immediate growth and expect additional rate cuts," said Dong Dongrak, a bond strategist at Daishin Securities. .

South Korea's economic growth has slowed over the past few quarters due to sluggish global demand and prolonged exports of semiconductors and cars due to the prolonged US-China trade war.

The central bank expects the growth rate in 2019 to be 2.2%, but the major investment banks have lowered the growth rate forecast across the board, with a minimum of 1.6%. The growth rate in 2018 was 2.7%.

The International Monetary Fund (IMF) is expected to cut Korea's 19 and 20 year growth forecasts by 0.6 percentage points on the 15th, to 2.0% in 19 years and 2.2% in 20 years Indicated.

According to the central bank data, the growth rate in the first half of 19 years was 1.9%, significantly slowing from 2.5% in the second half of 2018 and 2.8% in the first half of 2018.

The September Consumer Price Index (CPI), released by the Korea Bureau of Statistics, dropped 0.4% from the previous year, and the inflation rate was negative for the first time since the start of statistics in 1965.

In addition, the import price in September, announced by the central bank in the morning, recorded a fourth consecutive month of decline from the previous year. The longest decline has continued since the end of 2016.