Monetary tightening rate expected to ease in Q2/2011.

By bne IntelliNews June 14, 2011
South Korea's monetary tightening rate is likely to ease in the second half of this year. As reported by Xinhua News Agency, the central bank is likely to continue to increase rates during the period, though it is expected to be slower than the first half. The central bank is expected to conduct a 25 basis point (bps) rate increase per quarter in the second half. The central bank increased its benchmark seven-day repo rate by 25bps to 3.25% in June. The rate of monetary tightening is likely to be sluggish due to the persistent external instability, which include a soft patch in the U.S. economy as well as the European fiscal crisis and the expected easing of the consumer inflation.

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