The Bank of Korea is expected to keep its key rate at a historic low until July next year as it maintained expectations of a modest economic recovery in 2020, according to a report Sunday.
But the BOK may have no choice but to cut the key rate next July unless the United States and China agree to end their lengthy trade war by that time, Goldman Sachs said in the report.
In a widely expected move, the BOK slashed the key rate to 1.25 percent from 1.5 percent last week, marking the second rate cut in three months.
Goldman Sachs said, "The next rate cut is likely to come after some time, possibly July 2020, assuming no resolution of the US-China trade war by that time."
BOK Gov. Lee Ju-yeol has said the central bank has "some room for additional easing," keeping the window of further rate cuts open.