during a news conference at the bank's headquarters in Seoul
November 7, 2008. South Korea's central bank cut interest rates
on Friday for the third time in a month, joining a global wave of
monetary easing aimed at shoring up the world economy and
calming panicked financial markets. REUTERS/Jo Yong-Hak (SOUTH KOREA)
The Global Central Banks are panic about global recession threat, deflation and global force liquidation.
After yesterday BOE cut its main lending rate by 150 basis points, while ECB and The National Bank of Swiss slashed their interest rate by 50 basis points. Today, The Bank of Korea lowered interest rates for the third time in four weeks after a flurry of deep rate cuts across Europe failed to calm panicky investors. The bank reduced the key rate by 25 basis points to 4 percent, the lowest since 2006, adding to 100 basis points of cuts in October. Policy makers are focused on keeping "the economy from weakening too much," Governor Lee Seong Tae said, adding he's prepared to "take bigger actions if necessary."
The Bank of Korea is joining global efforts to prevent a recession and can't afford to be an outsider. The South Korea’s economic committee will do what's needed to ward off the risk of a severe slowdown in economic activity brought about mainly by financial-market unrest.
The central bank probably will cut rates further because, like other countries, Korea is clearly under a lot of pressure going through this financial turmoil, according to David Cohen, director of Asian forecasting at Action Economics in Singapore. South Korea has been 'very aggressive' in taking steps to aid its economy compared with Asian neighbors.
"Concerns about foreign-currency liquidity seem to have mostly diminished and now is the time to take more close care of the real economy," President Lee Myung Bak said this week.
Exports, the main engine of the economy's expansion, rose at the weakest pace in 13 months in October as shipments to China, South Korea's biggest market, fell for the first time since 2002. Retail sales were gained by the least in nine months in September.
Hyundai Motor Co., South Korea's second-biggest exporter, on Oct. 23 slashed its global vehicle-sales forecast for the year. Posco, the region's biggest maker of stainless steel, said last month it will cut output by about a third this quarter to cope with slowing demand.
ETFs/Stocks :
iShares MSCI South Korea Index Fund ETF EWY 25.38 -3.30 (-11.51%)Related Posts :Sources :
- Reuters: South Korea cuts rates again, November 7, 2008 1:28am EST
Bloomberg: South Korea Cuts Rate to 4% to Stave off Recession (Update1), November 7, 2008 01:09 EST
This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.
You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.
No comments:
Post a Comment