© Reuters. FILE PHOTO: A truck carrying a delivery container travels previous cranes at Pyeongtaek port in Pyeongtaek, South Korea, July 9, 2020. REUTERS/Kim Hong-Ji
By Jihoon Lee and Choonsik Yoo
SEOUL (Reuters) -South Korean exports tumbled for the primary 20 days of March and producer inflation eased final month, information confirmed on Tuesday, reinforcing expectations the central financial institution is not going to elevate rates of interest additional amid present market turbulence.
Asia’s fourth-largest financial system contracted final quarter for the primary time in 2-1/2 years damage by a slowdown in world demand for its exports and excessive family debt.
The nation’s shipments for the primary 20 days of March fell 17.4% from the comparable interval of final 12 months regardless that there was yet another working day this 12 months, led by a whopping 36.2% dive in gross sales to China, customs company information confirmed.
Financial institution of Korea information earlier within the day confirmed the producer worth index (PPI) in February was 4.8% increased than a 12 months earlier, with the tempo of enhance slowing for an eighth consecutive month.
Economists mentioned these figures confirmed the broad market expectations for weakening financial progress and easing inflation, elevating extra doubts in regards to the central financial institution’s tightening stance.
“Inflation will proceed to sluggish and the financial progress shall be so-so sooner or later, and now the abroad banking sector disaster will finally have an effect right here,” mentioned Moon Hong-cheol, economist at DB Monetary Funding.
South Korea’s central financial institution saved the coverage rate of interest unchanged at its final assembly on Feb. 23, ending a 12 months of uninterrupted charge will increase to struggle inflation. It subsequent meets on April 11.
The liquidity troubles at U.S. and European banks have sharply elevated the volatility in monetary markets, and South Korea can also be nervous in regards to the oblique results from the turmoil.
“The federal government is intently watching the state of affairs as volatility in world markets has elevated in relation to the failure of Silicon Valley Financial institution and the liquidity disaster at Credit score Suisse,” Minister for Commerce Ahn Duk-geun mentioned whereas presiding over a gathering on exports.