Credit Ágricole: BoK Meeting - FJElite
- The BOK is widely expected to hike its policy rate by 25bp to 2.75% on 16 July. The BOK has reiterated the need for rate hikes several times. Thus, market participants will be watching for the BOK’s hints on the timing of the next hike and the terminal rate for this rate hiking cycle.
- Considering that there will be the BOK’s macro forecast and six-month forward guidance update only in August, and that global crude oil prices have declined from the last BOK meeting, we do not expect the BOK to signal a back-to-back August rate hike and expect a rate hike in October. During the July meeting, we think the BOK is likely to signal further rate hike without a specific timeline to monitor more data.
- While the BOK would still signal more tightening, no sign of back-to-back hikes would keep the upside for KTBs limited. For FX, we expect the KRW to be supported by (1) SK Hynix’s ADR listing in the US and related USD inflows; (2) moderating foreign net equity selling; and (3) closer monitoring of FX authorities.
