Central bank leaves key interest rate unchanged

South Korea’s central bank on Tuesday left the key interest rate unchanged at a record-low level, citing economic concerns at both home and abroad.

In a widely expected decision, the Bank of Korea held the base rate steady at 1.5 percent for February for the eighth consecutive month.

Bank of Korea Gov. Lee Ju-yeol presides over a rate policy meeting on Tuesday at the central bank headquarters in downtown Seoul. (Yonhap)

The bank has kept the rate unchanged since July last year after four rate cuts in less than a year.

While warning against excessively pessimistic outlooks on the South Korean economy, BOK Gov. Lee Ju-yeol said the bank plans to inject 9 trillion won ($7.4 billion) to provide support for exports and investment.

Citing the recent outflow of foreign investment, he said the bank may consider taking appropriate countermeasures.

Lee also said he expects South Korea’s household debt to continue growing this year, though at a slower pace.

“The (bank’s) board forecasts that the global economy will maintain its recovery going forward, albeit at a moderate pace centering on advanced economies such as the U.S., but judges that it will be affected by factors such as financial and economic conditions in China and other emerging market countries, international oil price movements, and global financial market volatility,” it said in a released statement.

Tuesday’s decision came amid growing calls for an additional rate cut as Asia’s fourth-largest economy is suffering from weakening exports and sluggish domestic consumption.

Exports plunged 18.5 percent on-year in January, the fastest rate of decline in over six years.

(khnews@heraldcorp.com)