South Korean President Yoon Seok-yeol said on Wednesday that it is inevitable for South Korea's interest rates to be aligned with the United States to some extent in order to prevent capital outflows, and urged the Bank of Korea to cut its policy rate. His comments increased pressure on the Bank of Korea to lower interest rates, which are currently at a 15-year high of 3.50%, after the Bank of Korea extended its interest rate suspension for the 11th consecutive time in May.
The median analyst forecast showed the benchmark rate will remain unchanged in the third quarter before the Bank of Korea cuts its rate by 50 basis points in the fourth quarter, as some analysts pushed back their expected rate cuts after the stronger-than-expected GDP data. South Korean Prime Minister Han Deok-soo, who attended the press conference, made similar comments to Yoon Seok-yeol, saying South Korea's benchmark rate could be lowered in line with global trends as major central banks prepare to cut rates in the second half of the year.
