BOK’s Lee: Can consider normalizing rates only when economy heals from the virus outbreak

“We can consider normalizing rates only when economy heals from the coronavirus pandemic,” Bank of Korea (BOK), Governor Lee Ju-yeol said in a statement following the announcement of the central bank’s monetary policy decision on Thursday.

The South Korean central bank left the key rates unchanged at 0.50% earlier today, predicting the economy to contract this year by more than it forecast in May.

Additional quotes by Lee

Thursday's rate decision was unanimous.

Financial market looks very stable.

Uncertainties to growth path very high.

We can consider normalizing rates only when economy heals from the virus outbreak.

Ready to up purchase of govt bonds if needed.

Exports decline was bigger than expectations.

Recovery of exports may be delayed.

Third extra budget may add 0.1% to 0.2% to Korea growth this year.

BOK to convene a mtg tomorrow to decide on setup of SPV facility.

BOK to aggressively take measures to stabilize markets if needed.

Size of treasury bond purchase depends on market needs.

Will monitor funding needs by local financial institutions to decide whether to extend repo operations.

USD/KRW rebounds

USD/KRW extends the bounce and spike to daily highs of 1,205.30 on the BOK no rate change announcement and Governor Lee’s cautionary remarks.

At the time of writing, the spot adds 0.34% to trade at 1,204.59. The bulls continue to guard the 1,200 barrier.