Following Australia's Lead?

BMI View: Emboldened by the Reserve Bank Of Australia's rate hike, we believe that it only a matter of time before Korean policymakers decide to follow suit. We remain of the view that the tightening phase will kick off in January, but are increasingly open to the possibility of an earlier move should an overheating housing market continue to provide concern. With the local interest rate swap curve already looking steep, we reiterate that the best way to play monetary tightening is via the Korean won.

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