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South Korea’s central bank will opt to go big again and hike rates by another half-point next week, pushing borrowing costs higher than earlier predicted to support a weakening won and dull its effect on inflation, a Reuters poll showed.
That change in forecasts comes in the wake of widening rate differentials with an aggressive U.S. Federal Reserve which has hinted it would keep rates higher for longer.
Already down over 15 percent this year, the Korean won was expected to drop another 1.6 percent by end-2022, a separate Reuters poll showed. That precipitous fall came despite the Bank of Korea (BOK) raising interest rates by 200 basis points since last August.
But expectations were for the BOK to stay the course and continue to hike interest rates over the coming quarters.
