SEOUL, KOREA – The Monetary Policy Committee of the Bank of Korea has decided to keep the benchmark interest rate at current 2.75 percent. The committee held a regular meeting on December 13 and announced, "We have made a decision to maintain the interest rate at 2.75 percent."
For two months, the committee has refrained from changing the rate. In July and October, it had lowered the rate twice by 0.25 percentage point each.
Bank of Korea governor Kim Choong-soo said of the global economy, "The U.S. economy has continued a slow recovery while eurozone has kept underperforming. Emerging economies have shown improvements in major economic indicators.
The latest monetary policy decision had been widely expected by market watchers. That was because economic indicators have shown mixed signals including a rise in exports for two consecutive months and falls in domestic consumption and facility investment.
Given the high share of exports in the economy, this may be interpreted as a positive signal. But still it is hard to say external uncertainties have disappeared. It may be interpreted as a move to appease the market as a policy decision that may take market participants by surprise just before the Presidential election would cause confusion in the market.
*Article provided by The Korea Economic Daily
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