À̹ÌÁö È®´ë A majority of bond experts expect another inaction from the Korean central bank at the upcoming monetary policy meeting on Thursday despite market pressure for a rate cut.
According to the survey done by the Korea Financial Investment Association on 200 bond trader, 97 percent forecast the Bank of Korea would freeze its policy rate at 1.75 percent, trusting the central bank governor who has repeatedly said it was premature to discuss a rate cut.
The bond market survey index (BMSI) stood at 92.9 for May, down 7.1 point from 100 for April, the association said. A reading above 100 indicates there are more optimists on the outlook for the bond market and vice versa for a reading below 100.
The retreat was attributed to investors¡¯ weakening appetite for safe assets as the U.S. and China trade conflicts have been showing signs of easing at the external front, and the Korean government is expected to draw up a supplementary budget within this month.
The survey also showed that 26 percent of the respondents expected a rise in the yields on three-year government bonds in May, up 9 percentage points from the previous poll. A majority of 64 percent believed the yields would remain steady, down 14 percentage points, and 10 percent projected a cut, up 5 percentage points.
The BMSI for the exchange rate fell from 101 for April to 84 for May, as 21 percent of the experts, 9 percentage points more than the previous survey, believed the won would keep its weakening trend next month, according to the association.
By Kim Je-lim and Choi Mira
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]