Goldman Sachs predicts South Korea will cut base interest rate to 2.25% in third quarter

Goldman Sachs said on the 19th that South Korea's base interest rate will be lowered starting this month.
In a report titled "Possibility of Further Easing Due to Weak Demand and Decreasing Short-Term Tariff Risks," the Monetary and Monetary Affairs Committee of the Bank of Korea announced that it would consider monetary easing due to continued sluggish domestic demand and reduced uncertainty regarding U.S. trade policy.
The South Korean monetary authority also lowered interest rates by 25 basis points (1 basis point = 0.01 point) every quarter, ultimately reaching the current level.
The company predicts that the annualized interest rate will reach 2.25% in the third quarter of 2020. "If central banks in major countries, including the United States, which have been pursuing intermittent monetary easing, continue to ease monetary policy as expected, we will see a steady increase in interest rates," the company said.
"This will allow the Bank of Korea to focus on the development of the domestic macro economy and implement accommodative monetary policy when necessary."
In addition, “The implementation of strategic foreign currency hedging of the National Pension Service is the
"This will help ease the constraints on monetary policy," he said. However, he added, "If the supplementary budget is passed soon, the Bank of Korea may slow down the pace of interest rate cuts."
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