Korea: BOK should send a clear hiking signal to the public – Nomura

Analysts at Nomura suggest that their Bank of Korea signal indices (NBSI and NBSI+) are more positive (suggesting a greater likelihood of a hike) in October.

Key Quotes

“We expect the BOK to leave rates unchanged at 1.50% at its 18 October meeting, with one or two dissenting vote(s) for a 25bp hike.”

“We expect the BOK to clearly signal a hike at the 30 November meeting, allowing the public to prepare ahead of time.”

“The higher NBSI and NBSI+ readings are in line with our assigned 40%, 50% and 10% probabilities to a 25bp rate hike in October, November and January or thereafter, respectively. That said, our BOK policy expectation is a close call.”