[THE INVESTOR]  The Bank of Korea is likely to hold its key rate steady in October, polls showed on Oct. 12.

The central bank is set to hold a monthly rate-review session on Oct. 13 to decide whether to maintain or cut an all-time low rate of 1.25 percent. It is also set to announce its estimates on growth outlook and consumer prices for this year and next year.

A recent poll conducted by Yonhap Infomax , according to Yonhap News, showed that all 14 economists surveyed forecast the BOK to hold the key rate steady at the current record-low level for October.

 

Ma Tieying, an economist at DBS in Singapore, said South Korea‘s central bank could hold rates at 1.25 percent, noting that the latest data suggest that the growth outlook is basically in line with the BOK’s projections.

“There is no compelling pressure for the BOK to further cut rates to support growth,” Ma said.

BOK Gov. Lee Ju-yeol said last week that the room to maneuver in monetary policy is “relatively limited,” citing sharply increased household debt.

A separate poll showed 98 percent of 200 bond market experts surveyed said they expect the BOK to maintain its key rate unchanged in October.

The upcoming decision comes amid high expectations that the US Federal Reserve could raise its interest rate one time within this year. Last month, the Fed maintained its target range for federal funds rate unchanged at 0.25 percent to 0.5 percent.

In July, the BOK said the local economy could grow 2.7 percent this year and 2.9 percent next year. It also said consumer prices could rise 1.1 percent and 1.9 percent this year and next year, respectively.

(theinvestor@heraldcorp.com)