Bank of Korea's Rhee Seeks to Curb Moves Based on Rate Cut Hopes.

Bank of Korea Governor Rhee Chang-yong has expressed concern about market expectations for a near-term interest rate cut, stating that they are "somewhat excessive." The bank's board unanimously decided to keep the seven-day repurchase rate unchanged at 3.5%. While the bank has laid the groundwork for a rate cut, Rhee emphasized the need to safeguard financial stability and prevent markets from getting ahead of themselves. South Korea's markets have been pricing in a rate cut since May, which has put pressure on the won and led to increased import prices. The bank is preparing to switch lanes on policy but does not want to box itself into a specific timing for the move. The board extended the holding pattern for interest rates, with two members open to a cut in the next three months. The bank aims to wait until it has enough confidence that inflation will continue moving toward its 2% target before considering easing policy. [Extracted from the article]

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