South Korean bank freezes key interest rate

May 10th, 2012 - 1:50 pm ICT by IANS  

Seoul, May 10 (IANS) South Korea’s central bank said Thursday that it froze the benchmark interest rate at 3.25 percent for May, leaving the 7-day repo rate unchanged for 11 straight months.

The Bank of Korea (BOK)’s decision was in line with market consensus as experts predicted the rate freeze due to conflicting factors such as the downside risks to the economy at home and abroad and the remaining inflationary pressure, reported Xinhua.

The BOK has lifted the borrowing costs by a total of 125 basis points (bps) in five steps to 3.25 percent since July 2010 in a bid to curb inflation. Before that, the central bank lowered the key rate by 325 bps to a record low of 2 percent following the 2008 global financial crisis.

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