An October cut likely from BoK

The persistent's sluggishness in the trade performance and the large inventory overhang in electronics increase the likelihood that Q3 GDP growth may undershoot the official expectations of at least 1% q/q sa. 

"After the sharp drop in exports in August, the BoK is now expected to deliver a further 25bp rate cut in Q4, most likely on 15 October, when it presents its revised outlook for the economy", says Barclays. 

The BoK would prefer to act after the FOMC meeting as well as after the initial delivery of the fiscal supplementary spending. A possibility of a later move is seen in November, but the risks are low.

"Moreover, this suggests that the BoK could revise downward its 2015 full-year growth forecast at the October meeting, likely to slightly below 2.5%. To reflect the change in our policy rate forecast, we also delayed our first rate hike forecast to Q3 16, from late Q1 16", forecasts Barclays.

More importantly, the existing focus on engineering a weaker KRW bias, possibly by stockpiling essential commodities such as fuel, will remain.