Nomura economist Young Sun Kwon notes that the Bank of Korea (BOK) has unexpectedly cut its policy rates by 25bp to 2.50%.
He had previously assigned a 45% likelihood to the BOK being forced to cut rates as political pressure for such a move was building on the BOK. He feels that today's decision suggests to us that BOK Governor Kim's leadership among the monetary policy committee members has weakened significantly. That said, he writes, “There is a risk that the BOK will cut rates further in H2. We will look at our forecasts after the post meeting press conference and the release of the accompanying statement.” – FXstreet.com (Barcelona)