opinion
Entered 2024.04.07 17:42 Modified 2024.04.07 17:42 Ground A34
Park Han-shin, Deputy Minister of Economic Affairs
The Bank of Korea’s Monetary Policy Committee will hold a monetary policy direction meeting on the 12th and decide whether to adjust the base interest rate, which is currently 3.50% per annum. The market predicts that the base interest rate will be frozen at this Monetary Policy Committee meeting. In this case, it is the 10th consecutive freeze since February of last year.
The prospect of interest rates being frozen is because domestic prices of agricultural, livestock and fishery products rose 11.7% in March, and high inflation rates are maintained, especially for food. For this reason, the consumer price inflation rate last month was 3.1%, exceeding 3% for two consecutive months. In addition, as the timing of the U.S. central bank’s (Fed) interest rate cut is still uncertain, it is believed that it is unlikely that the Monetary Policy Committee will preemptively adjust the interest rate downward. However, attention is being paid to whether there will be a minority opinion that mentions the need to lower interest rates even as the decision to freeze is made. On the same day, Statistics Korea announces ‘March employment trends’. The number of employed people over the age of 15 in February was 28,043,000, an increase of 329,000 from the same month last year, showing an increase of 300,000 for two consecutive months. However, most of the employed, or 297,000, who increased due to the effects of aging, etc., were in their 60s or older. On the other hand, the number of employed people aged 15 to 29 and 40 to 49 decreased by 61,000 and 62,000, respectively. It is assumed that employment, which shows an overall good trend, will continue to increase in March, while differences by age group will appear.
Financial authorities, including the Financial Services Commission, announce household loan trends for March on the 11th. In February, household loans across the financial sector decreased by 1.8 trillion won compared to the previous month. This is the first decline in 11 months since it decreased by 6.5 trillion won in March last year. However, as other loans decreased in February due to seasonal factors such as Lunar New Year bonuses, it is unclear whether the decline in household loans will continue in March. Overseas, the US consumer price index (CPI) for March will be announced on the 10th (local time). With the expected timing of the Fed’s interest rate cut being pushed back from March to June or later, if the CPI appears higher than expected, this could act as a factor in further delaying the interest rate cut. Experts predict that the CPI increase in March will be smaller than that in January and February.
The US Producer Price Index (PPI) for March will also be released on the 12th. PPI, the wholesale price, serves as a leading indicator of retail prices. Experts predict that the PPI in March will slow down compared to February. If consumer and producer price growth appears to have slowed, market expectations for an interest rate cut are expected to increase. Starting next week, the earnings announcement season for global companies begins. The first quarter performance of Delta Air Lines on the 10th and JP Morgan, Wells Fargo, and Citi on the 12th will be released.
2024-04-07 08:42:54
#월요전망대 #Bank #Korea #freeze #benchmark #interest #rate #10th #consecutive #year
