BoK to hold base rate at 3.50 at April 11 meeting

BENGALURU, April 7 Reuters The Bank of Korea will opt to support a rapidly slowing economy by holding its main interest rate at 3.50 on Tuesday, according to a Reuters poll of economists that showed a slim majority now expect a 25basispoint cut by the end of 2023.

Policymakers at the BoK, who have raised rates by 300 basis points since August 2021, are wary of overtightening an exportdependent economy that is on the brink of a recession, especially when global growth is also slowing.

Inflation eased to a oneyear low of 4.2 in March, but it is still double the BoK39;s 2 target and not expected to get to that level for at least another year.

All but one of 40 economists in the April 36 Reuters poll expected no change to the 3.50 base rate, already the highest since late 2008, at the April 11 meeting. Only one forecast a 25basispoint hike to 3.75.

The Bank of Korea has become less hawkish and is almost certain to leave interest rates unchanged, said Dave Chia, an economist at Moody39;s Analytics.

Considering weak consumption and high household debt, further rate hikes would be devastating to lowerincome earners and economic growth. The recent easing of inflation is good news, but volatile oil prices still present a risk.

BoK Governor Rhee Changyong told reporters after the February monetary policy meeting that the central bank would not resume its rate hikes if inflation continued to moderate.

The risk of a…