South Korea’s central bank leaves key rate unchangedJanuary 13th, 2012 - 3:33 pm ICT by IANS
Seoul, Jan 13 (IANS) The Bank of Korea (BOK) left its benchmark interest rate unchanged at 3.25 percent Friday, keeping its rate freeze stance for a seventh straight month due to lingering uncertainties at home and abroad.
Governor Kim Choong-soo and monetary policy board members decided to freeze the seven-day repo rate at 3.25 percent for the first monetary policy meeting of this year after raising the rate by 25 basis points (bps) in January, March and June last year, reported Xinhua.
The BOK has lifted the borrowing costs by a total of 125 bps in five steps since July 2010.
The decision was in line with market expectations as experts predicted the freeze due to remaining uncertainties at home and abroad.
South Korea’s economic growth has slowed moderately amid persistent price instabilities.
“Our economy saw employment maintain its recovery trend, but some economic indicators were somewhat weakening amid lingering factors that could destabilize prices,” the Ministry of Strategy and Finance said in a so-called Green Book, a monthly report assessing the nation’s economic conditions.
According to the latest economic data, the country’s industrial output and private consumption weakened amid the lingering external uncertainties. Production in the manufacturing and mining sectors contracted 0.4 percent in November from a month earlier, and retail sales shrank 0.6 percent over the cited period.
Exports, which account for more than half of the Asia’s No.4 economy, have remained solid, and the labour market indicated that the economy may continue to create jobs despite external uncertainties such as the European fiscal crisis.
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Tags: basis points, benchmark interest rate, bok, economic conditions, economic data, economic indicators, fiscal crisis, five steps, labour market, market expectations, monetary policy, private consumption, rate freeze, retail sales, s central, s industrial, seoul, seven day, south korea, xinhua