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interestrateripoff

Bok Cuts Rate To 4-Year Low As Lee Risks Capital Outflows

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http://www.bloomberg.com/news/2014-10-15/bank-of-korea-cuts-rate-to-4-year-low-to-bolster-demand.html

The Bank of Korea cut its benchmark interest rate to a four-year low as Governor Lee Ju Yeol risks spurring capital outflows in his effort to bolster the economy.

The central bank lowered the seven-day repurchase rate to 2 percent from 2.25 percent, the second reduction in two months, and downgraded its estimates for growth and inflation. Twelve of 22 economists surveyed by Bloomberg forecast the rate cut, while nine projected no change.

The decision was opposed by one board member and follows calls from Finance Minister Choi Kyung Hwan to ensure monetary policy is in “harmony” with the government. Lee warned capital may flow out of South Korea if the interest rate gap with other nations narrows and the won falls, and said countermeasures should be considered.

“The possibility of a further rate cut is open until the first half of next year,” said Park Jong Youn, a Seoul based fixed-income analyst at Woori Investment & Securities Co. “The BOK’s belatedly revised down its economic outlook, but 2015 figures still look too rosy.’

Everyone slowly moving towards ZIRP?

It seems now you can only have growth with low interest rates.

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http://www.bloomberg.com/news/2014-10-15/bank-of-korea-cuts-rate-to-4-year-low-to-bolster-demand.html

Everyone slowly moving towards ZIRP?

It seems now you can only have growth with low interest rates.

It seems now you can only expand the debt bubble with low interest rates.

When the limits of that bubbel are reached...we have a REAL problem.

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