Published:
Korea's inflation slowdown provides breather for BOK
The Bank of Korea, though taking a wait-and-see approach, is given leeway to ease monetary policy to support growth.
DBS Group Research noted:
Our 2012 growth forecast is cut to 3.1% from 3.4%, on account of the softness of both external and domestic demand.
Inflation forecast for 2012 is also revised down to 2.5% from 3.0%.
The slowdown in inflation provides some leeway for the Bank of Korea to ease monetary policy to support growth. The BOK is, however, taking a wait-and-see approach.
The current account surplus and the adequacy of foreign reserves should help cushion the volatility in the won during global turmoil.
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