What to expect from South Korea's new finance minister

Rate cut still unlikely, says analyst.

According to Nomura, President Park Geun-Hye today appointed Dr. Hyun Oh-Seok as finance minister. DBS expects Hyun to deliver a stimulus package as early as in April. 

Here's more from DBS:

We expect stimulus measures to be targeted, focusing on specific areas such as the property market, small businesses and low-income families.

However, we do not expect a macro level stimulus such as a rate cut because the economy is not in recession and growth momentum should improve modestly.

Given our view that upcoming data (February industrial output and March exports) will show an improvement, we see no imminent need for a supplementary budget. 

However, if one is approved, its support of GDP growth would further reduce the need for a rate cut. A soft landing of the household debt problem is on President Park's 140-point agenda.

We believe that the Bank of Korea is wary of accelerating the growth recovery via further rate cuts as such a move could trigger another round of household debt increases, given that the new government will likely announce measure to boost the property market.

We expect Finance Minister Hyun shares the same opinion.