The Bank of Korea’s monetary policy committee on Friday left the base interest rate unchanged at a record-low 1.5 percent for the 11th consecutive month in May.

The decision was expected by 11 of 12 analysts in a Yonhap News survey.

The rate freeze comes as the Korean central bank comes under increasing pressure to provide liquidity to two policy banks which are heavily exposed to troubled shipping and shipbuilding industries. Discussions on how to recapitalize the state-run lenders are currently ongoing at a special team comprising officials from the Finance Ministry, BOK and other authorities.  

BOK Gov. Lee Ju-yeol, while stressing the bank’s willingness to cooperate in efforts to support corporate restructuring, said loans are a better option than direction injections of BOK money.

Asia’s fourth-largest economy grew 0.4 percent in the first three months of this year on sharp contraction in exports, slowing from the 0.7 percent on-quarter expansion in the final three months of 2015, the BOK said. 

Friday’s decision was the first for four of the BOK’s seven board members as they began their four-year term in late April. 

By Lee Sun-young (milaya@heraldcorp.com)