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| ▲ This undated rendered image depicts South Korean government bonds. (Yonhap) |
bond market-May sentiment
Bond market sentiment improves for May: poll
SEOUL, April 8 (Yonhap) -- South Korea's bond market sentiment improved for May amid expectations that inflationary pressures will ease and the Korean won will strengthen against the U.S. dollar, a poll showed Wednesday.
The Korea Financial Investment Association said its bond market survey index (BMSI) rose to 96.3 for next month, sharply up from 90.8 for April.
A BMSI reading above 100 means more experts expect bond market conditions to take a turn for the better. The survey was conducted on 100 bond traders and fund managers here.
On the policy rate outlook, 93 percent of respondents said they expect the Bank of Korea (BOK) to freeze the country's benchmark rate this week. The central bank is scheduled to hold its latest rate-setting meeting Friday.
Notably, 6 percent of the surveyed expected the BOK to raise the key rate, citing persisting uncertainties stemming from the war between the United States and Iran. This compares with the previous survey where no respondent expected a rate hike by the central bank.
The BMSI for interest rates rose to 102 for May from April's 99, indicating bond experts expect borrowing costs to go down next month.
This was due, in part, to growing anticipation for more foreign capital inflows, following South Korea's recent inclusion into the World Government Bond Index (WGBI), the association said.
The index for exchange rates surged to 95 from 80, apparently highlighting the experts' expectations for the South Korean currency's appreciation against the U.S. dollar, according to the survey.
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