Seoul: Half of bond experts in South Korea expected consumer prices to rise next month, as the effective closure of the Hormuz Strait amid the ongoing Middle East crisis is expected to fuel inflationary pressure, a poll showed Tuesday.
According to Yonhap News Agency, the recent survey of 100 bond market experts conducted by the Korea Financial Investment Association (KOFIA) revealed that 50 percent of respondents anticipated an increase in consumer prices in April. This marks a significant increase from the 15 percent who held the same view in February.
Additionally, 35 percent of those surveyed expressed concerns about the Korean won's further depreciation against the U.S. dollar. The local currency had recently plummeted to its lowest level since March 10, 2009, briefly touching the crucial 1,500-won mark for the first time in 17 years due to the Middle East conflict. It has since rebounded to 1,487 won per dollar as of 11 a.m. Wednesday.
Regarding bond yields, a growing number of experts predict an increase in April. The Bank of Korea (BOK) is expected to maintain the country's base rate for an extended period amid the ongoing Middle East crisis and the weak local currency.
KOFIA reported that its bond market survey index (BMSI) for April dropped to 90.5, down 5.7 points from 96.5 in March. A BMSI reading below 100 suggests that more experts foresee deteriorating conditions in the bond market.