Bank of America: Bank of Korea may focus on the weak Korean won at the July meeting

Jinse Finance reported that on July 9, Bank of America economists stated in a report that while the market generally expects the Bank of Korea to raise interest rates by 25 basis points on July 16, the bank's stance on the Korean won may be more critical than the rate hike itself. Policymakers may focus on the continued weakness of the Korean won. Despite falling oil prices and repeated warnings from the authorities, the weakening won has kept inflation at a high level. The economists noted that ongoing outflows of overseas stock funds and exchange rate volatility reinforce the case for further policy normalization, but successive rate hikes are not their baseline expectation. The market will also be watching whether the Bank of Korea expresses greater concern about the financial stability risks posed by rising home prices and leveraged ETF trading.