On the 29th, Bank of Korea Governor Lee Chang-yong expressed a cautious stance regarding the U.S. District Court's judgment that the reciprocal tariff policy pursued by U.S. President Donald Trump is "illegal."
On the same day, Governor Lee of the Bank of Korea, just before the Monetary Policy Committee meeting in the Bank's headquarters in Jung-gu, Seoul, responded to a reporter's question, "Will the U.S. District Court's ruling be reflected at all in this interest rate decision?" by saying, "I think we should look at the effects more closely."
According to the Associated Press (AP) news agency, on the 28th (local time), the U.S. Federal Court of International Trade ruled that the reciprocal tariff announced by President Trump on April 2nd is illegal. The court explained the ruling by stating, "The U.S. Constitution grants the power to impose taxes to Congress, not the President. This cannot be overturned by the President's emergency powers to protect the U.S. economy."
The Monetary Policy Committee meeting started on the 16th floor of the Bank headquarters that morning. Governor Lee entered the meeting room at 8:59 a.m., one minute before the meeting began. Appearing with a tie that was a mix of black and pink, he sat at the head table and, at the request of reporters, knocked the gavel. After that, he seemed to be conscious of the early voting starting today and told reporters, "Make time to go vote."
The market predicts a high possibility of an interest rate cut. This is due to domestic political instability and the risks associated with Trump's tariffs, which have increased downward pressure on the economy. A survey conducted by the Korea Financial Investment Association among 100 professionals involved in bond holdings and management from the 16th to 21st found that 69% of respondents expected an interest rate cut.
The announcement of the Bank of Korea's revised economic outlook on that day also supports the likelihood of a cut. The Bank announced in February that it expected Korea's gross domestic product (GDP) growth rate for the year to be 1.5%. However, as forecasts from institutions like the Korea Development Institute (KDI) emerged, suggesting that the growth rate would fall below 1% due to worsening domestic conditions, an adjustment of the outlook became inevitable. If a slowdown in growth is anticipated, the need for an interest rate cut to stimulate the economy increases.
Baek Yun-min, a researcher at Kyobo Securities who predicted the interest rate cut, said, "As the likelihood of this year's growth rate falling below 1% rises, and downward pressures on the economy increase along with broadened structural growth risks, the Bank of Korea's proactive currency policy to defend the economy will be required more than ever."