Bank of Korea introduces new forward guidance mirroring Fed's dot plot

SEOUL, Feb 26 : South Korea's central bank has decided to expand its forward guidance on monetary policy by providing the views of its seven board members on a quarterly basis with 21 dots in the six-month term, mirroring the U.S. Federal Reserve's so-called "dot plot".

The Bank of Korea said the new scheme would be first introduced at the policy meeting being held on Thursday, after 18 months of pilot tests, and at policy meetings every February, May, August and November onwards, when the central bank releases its quarterly economic forecasts.

Governor Rhee Chang-yong, who took up the post in April 2022 and introduced for the first time in the bank's history a forward guidance scheme, has provided the views of six board members, excluding himself, on interest rate paths over a three-month term at each policy meeting since October 2022.

Under the new quarterly scheme, each of the seven board members will anonymously provide three projections for interest rate paths in the next six months, reflecting his or her views on possibilities.

The so-called "dot plot" will be released at 10:30 a.m. local time (0130 GMT), after the board holds a policy meeting at 09:00 a.m., along with information on dissenters, which has so far been announced in opening remarks at press conferences held later in the day.