À̹ÌÁö È®´ë This week¡¯s monetary policy is widely watched for additional non-rate easing actions such as the option of adding corporate bonds in its bond purchase program as the Bank of Korea (BOK) has already cut the policy rate to zero range in an extraordinary meeting last month.
According to Maeil Business Newspaper poll on 10 economists, eight anticipated the central bank to keep the benchmark rate unchanged at 0.75 percent while two called for rate cut at Thursday¡¯s meeting.
The bank cut the benchmark rate by half a percentage point at an emergency meeting on March 16 as financial markets were rattled by coronavirus spread across the globe.
¡°The bank needs to keep maneuvering room,¡± said Cho Young-mu, senior researcher at LG Economic Research Institute, adding that ¡°Further cut won¡¯t bolster exports or encourage more loans to companies.¡±
What can dominate the discussions at the monetary policy meeting are additional radical moves to ease immediate liquidity squeeze due to battered stock and debt markets.
¡°The debt yield is not coming down despite the rate cut,¡± pointed out Hong Sung-il, senior economist at Korea Economic Research Institute.
¡°Easing the liquidity shortage for corporate sector especially below the investment grade is critical,¡± said Yoon Yeo-sam, a Meritz Securities researcher.
Some demand more aggressive rate and non-rate actions during emergency times.
¡°The bank could deliver a rate cut as early as May, as four monetary policy committee members whose tenure end this month would want to leave enough policy room for their successors,¡± said Shin Hwan-jong of NH Investment & Securities.
Park Tae-geun, senior bond market researcher at Samsung Securities, predicted another cut after the April 15 general election.
One economist anticipated the key rate to go down to 0.5 percent in the second half.
¡°The bank would make the move after more monitoring over the economic movement in the April-June quarter at home and abroad,¡± said Lee Mi-seon of Hana Financial Investment.
Meanwhile, two economists were in favor of immediate rate cut.
¡°This is not a regular downturn but a crisis,¡± said Park Seong-wook, research chief at Korea Institute of Finance. Central banks have been employing aggressive easing in conventional and unconventional means amid fears of a global-wide recession due to the worst pandemic in a century.
Ahn Dong-hyun, Seoul National University economics professor also saw the need for an immediate cut in rate. ¡°It is better to act early than later,¡± he said.
Many expect the gross domestic product in the first quarter to be released on April 23 to show a contraction from the previous three-month period.
By Song Min-geun, Kim Hyung-joo, and Cho Jeehyun
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]