SEOUL– A majority of bond mavens in South Korea predict the central bank to hold its key interest steady for July amid the prolonged coronavirus fallout, a poll showed Tuesday.
According to the survey of 200 bond experts by the Korea Financial Investment Association, 89 percent of the 100 respondents said the Bank of Korea (BOK) will likely freeze its policy rate at a rate-setting meeting slated for Thursday.
The number of standpatters was down nine from the previous month. In contrast, 11 experts, up two from June, expected a rate increase.
In late May, the central bank held its policy rate steady at 0.50 percent in a bid to help cushion the economic impact of the COVID-19 pandemic.
The survey also showed 67 of the respondents forecasting local bond yields to remain steady this month, with 26 and seven predicting increases and drops, respectively.
The association also said its bond market survey index (BMSI) stood at 85.4 for July, up 5.4 points from the previous month.
Yet the July number was still below par. A BMSI reading below 100 means more experts expect bond market conditions to worsen.
“Bond-market sentiment improved slightly for July from the prior month due to flight to quality stemming from a COVID-19 resurgence and concerns over coronavirus variants,” it said.
Source: Yonhap News Agency