South Korea's inflation is 'mostly driven by the supply side,' StanChart says

Yes, if Fed does not move in June, it’s going to be tough will be OK to move in in July. So I think that can be delayed depending on on the Fed like a pass. So but if like the other central bank ECB cost in June and other central bank are sending a a mass I mean to move synchronization then be OK can still move in in July. And all like a fan sending a strong mass is in June. And even though they don’t cut in June they next movie is going to the cut then be OK can move in July as we’re still waiting for the Bank of Korea decision to come through and no change is expected. What would you look out for in the policy statement, What is the keyword that you would look out for and what’s the language that you want to you would expect to hear from Governor Etanyo. I think in NPC statement I want to see how they assess the inflation path like a weather inflation currently over 3% will moderate in second-half of the year and ditching to like a 2% level I think so which can provide some comfort zone for be OK to cut the race. So we’ll see or how they assess the like the inflation path. For them recently the expected inflation has gone up from 3% to 3.2%. So they they would see how they assess like the expected inflation change. I think others probably how they see the Korea one movement because they they don’t like the volatility and even though they think interest does not decide the Korea One level but the when the Korean one is decide, Korean public is always watch out for the high Korea One with Korea One. So I think it’d be OK You need to be mindful of the Korea One movement too. And I think we have the Bank of Korea decision out to Sherry. Can you break that for us? We do indeed Sherry as expected Bank Korea keeps the base rate unchanged at 3 1/2%. Royces poll was looking for 3 1/2% and as you have been reporting, Sherry, what they say about the currency, what they say about the inflation risk moving forward and what the next move could potentially be and how long rates are going to be on hold at 3 1/2 percent. Whether this is an extended pause or not is all going to be important in terms of the guidance. What we expect to hear from the Bank of Korea just quickly with a dollar against the Korean won, 1368 is where we are standing. So Korean won under some pressure. Sherry, yeah. So new move on the currency when it comes to the Korean won here on the back of the decision here and obviously this is very much in line with expectations. But I do want to go back to inflation trajectory and that’s really the key that you’re going to be look out for in the policy statement. It’s really the supply side of pressures and it’s not just Korea, it’s also the similar dynamic that we see in the US as well. What is your trajectory? Is it more pressure coming from energy going forward or agricultural products? It what is it, as you said, like we haven’t seen any demand pool inflation in Korea. It’s mostly driven by the supply side. So I think it’s a key is going to be the oil price, how the oil price will play out and that is very high relation with the geopolitics. So that’s the one key agriculture product price has gone up. I think it will ease out, you know coming to the like a summertime. So toward the end of the year, I think the inflation will come down. We have our point inflation has been falling. It means excluding fresh food and the energy, which is a leading indicator of the decline in the inflation.