Economists' Outlook on BOK's October Decision: A Delicate Balance Amid Housing Market Risks
In a surprising turn of events, the Bank of Korea's monetary policy decision in October is now a topic of intense debate among economists. While most board members had initially signaled a willingness to cut interest rates, recent developments in the housing market have led many to predict a hold rather than a reduction. This shift in expectation comes as Seoul's property prices show a rebound, raising concerns about financial stability.
According to Kathleen Oh, chief Korea economist at Morgan Stanley, the central bank is likely to pause in October before resuming rate cuts in November. This marks a significant change from the earlier prediction that a rate cut would occur this month. Despite the economy's relatively stable fundamentals, the upward trend in property prices suggests that policymakers are cautious about the potential impact of housing measures.
The key question remains: Will the BOK's decision to hold rates in October be a temporary pause or a more permanent shift in strategy? As the housing market continues to influence economic policies, economists and investors alike are closely monitoring these developments, aware that any misstep could have significant implications for the country's financial health.
