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According to a survey of 26 analysts conducted by Reuters, a majority of them believe that the Bank of Korea (BOK), South Korea’s central bank, is likely to slash the key interest rate to a record low this Thursday, in an effort to counter the negative economic impact of the infectious coronavirus outbreak.

Key findings

Sixteen of 26 analysts surveyed by Reuters predicted the Bank of Korea’s (BOK) seven-member board would cut the policy rate to 1.00% at its February meeting in a pre-emptive move.

Another four analysts expect the central bank to cut rates at least by May.

In January, only six of 29 analysts saw a cut in February after the central bank struck a more upbeat tone at its last policy meeting due to improving trade conditions and a resilient domestic environment.

Economists are concerned the virus outbreak will hit economic growth in both the first and second quarters.

KRW closes Monday’s bearish gap

The Korean won (KRW) has staged a solid comeback on Tuesday against the greenback, as USD/KRW slumps 0.60% to 1,209.03, closing Monday’s bullish opening gap.

Despite the rebound in KRW, the market sentiment remains tepid, as the South reported 60 new cases of the coronavirus today, increasing the total number of infected patients in the country to 893. The death toll rose to 9.