19 Securities Firms Say "Interest Rate Hikes Will Happen... In August or October-November"

Bank of Korea Governor Lee Ju-yeol is responding to lawmakers' questions at the Planning and Finance Committee plenary meeting held at the National Assembly in Yeouido, Seoul on the 16th.
[Photo by Yonhap News]

[Asia Economy Reporter Lee Seon-ae] With the Bank of Korea having made a rate hike within the year a foregone conclusion, the securities industry has released forecasts on the timing of the first increase.

According to the financial investment industry on the 18th, all 19 securities firms that issued reports after the Monetary Policy Committee meeting on the 15th predicted one or two rate hikes within the year. Six firms, including Hana Financial Investment, Kiwoom, Daishin, Shin Young, Hi Investment & Securities, and KTB Investment & Securities, expected the first hike to occur in August.

Thirteen firms, including NH Investment & Securities, Korea Investment & Securities, and Samsung Securities, anticipated the first hike to be in October or November. However, among these 13 firms, five added that they could not rule out a rate hike in August. This is because whether the spread of COVID-19 subsides will be the key factor in deciding an August hike.

In total, 11 securities firms either expect (6 firms) or cannot rule out (5 firms) a rate hike in August. These 19 securities firms forecast that the Bank of Korea will raise rates two to three times in total from the start within this year through the end of next year. Three firms expect an additional hike in October or November following the August increase, and one firm forecasts an additional hike in November or the first quarter of next year after August.