time now for an in-depth look at the market news this afternoon and for that i'm joined on the line
by dr kim zaiwan professor of economics at ewa women's university professor kim good to have
you back on today thank you for making time devon well the bank of korea has now raised
interest rates two months in a row for the first time since 2007. they decided to do this despite
the dampening effect it could have on the economy why is that and what do you make of this decision
uh finally a bank of korean height is key interest rate by a quarter percent
uh today so his key interest rate became 1.75 as of today uh this has been highly expected as bank
of korea predicted uh this year's inflation could hit the highest level in 14 years amid
soaring oil commodities and commodity prices bank of korea has emphasized that its top
priorities to keep inflation in check before it gets out of control though it remains cautious
that rising varying costs could put a damper on economic recovery today's raised market
the third rate hike this year after uh 0.25 increases in both january and april
uh bank of korea will raise the interest rate further along with u.s banks over uh 2 interest
rate hikes until next year but bank of korea did not take the big step or 0.5 rate high today
no they didn't and also out of the bok today it's raised its forecast for inflation it's
also lowered its forecast for gdp growth partly because of the slowdown in china and
the soaring commodity prices you mentioned what do you make of these projections from the bok
along with raising its interest rate today bank of korea revised upwards inflation outlook for
this year to 4.5 from uh 3.1 projected three months earlier uh i have to say that this
inflation forecast revision over one percent up is a a huge and rare adjustment uh the forecast
could be the fastest price uh growth since 2008 when prices grew 4.7 on annual basis
uh bank of korea's economic outlook prediction was also lowered from three percent to uh 2.7
percent projected three months earlier korean economy has been on the recovery track thanks to
robust exports and expectations are growing for a rise in consumption thanks to recently eased
social distancing roles amid a lab up in corovirus infections uh korean economy was expected to be
fully recovered from the pandemic with previous uh over three percent annual growth but updated uh
2.7 percent growth means this full recovery will be delayed until next year right all those numbers
going in the right direction but neither of those two figures they updated today are going in the
right direction still the bok is expected to uh take several more of these so-called big steps on
rates this year 50 basis points each time minutes from last month's meeting uh at the fed that is
rather show most members do support that what came out of the the fed minutes released on wednesday
that means uh which was released yesterday point to more rate hikes that go further
than the market anticipates according to muniz uh not only did policymakers see the
need to increase benchmark borrowing rates by uh 0.5 percent but they also said similar
hikes likely would be necessary at the next several meetings
uh they further noted that the policy uh may have to may have to move past a mutual stance in which
it is neither supportive nor restrictive of growth an important consideration for central bankers
that could echo through the economy overall as the fed is trying to pull down inflation uh running
at a 40-year high they will go for the biggest rate increase in in 22 years until next year
right and professor uh finally the fed minute seemed to be encouraging for investors stocks on
wall street closed higher overnight the nasdaq by one and a half percent korean stocks though
today in the end closed lower what's been the impact of these central bank moves on the markets
u.s stocks rose wednesday after several retailers offered
investors some optimism for this year's sale and the release of minutes from the federal reserve
most recent police meeting signaled a few changes in the central bank's plan to fight inflation
the s p 500 index rose one percent the nasa composite also uh climbed uh
uh one point five percent which was a reversal from a sharp sell-off in tech stocks
the day before uh that belgians industrial also rose point six percent uh yesterday
before the announcement announcement of the a quarter percent interest rate high bank of korea
domestic markets were rising today but as soon as uh the key interest rate news arrived at the
market both of cosby and costa we traded uh cosby lost 0.2 percent and costa rosa lost 0.1 today
right well professor we have to leave it there for today uh thank you as always for coming on
we appreciate your insights thank you very much