Bank of Korea keeps key interest rate at 1.5%
- 6 years ago
Korea's central bank has kept its key rate unchanged at one-and-a-half percent.
Kim Hyesung explains what's behind the decision on Thursday during the central bank governor's first monetary policy meeting since his reappointment last month.
The Bank of Korea on Thursday kept its benchmark interest rate unchanged at one-point-five percent.
This is the third freeze since the last rate hike in November, when the BOK raised its record low interest rate for the first time in over six years by a quarter percentage point.
The central bank said inflation remains far below its 2 percent target.
In its January forecast, the BOK said it expected inflation to hit 1.7 percent this year.
Yet, the country's consumer price index rose only 1.3 percent in March.
Moreover, the strengthening Korean won, which hit a more than a three-year high against the U.S. dollar last week, further weakened inflationary pressure.
The governor has repeatedly said South Korea's monetary policy will remain accomodative.
But the central bank is under pressure to implement monetary tightening if the U.S. Federal Resereve hikes rates again in the latter half of this year, after the Fed rate hike in March already pushed U.S. borrowing costs above South Korea's for the first time in more than 10 years.
Kim Hyesung, Arirang News.
Kim Hyesung explains what's behind the decision on Thursday during the central bank governor's first monetary policy meeting since his reappointment last month.
The Bank of Korea on Thursday kept its benchmark interest rate unchanged at one-point-five percent.
This is the third freeze since the last rate hike in November, when the BOK raised its record low interest rate for the first time in over six years by a quarter percentage point.
The central bank said inflation remains far below its 2 percent target.
In its January forecast, the BOK said it expected inflation to hit 1.7 percent this year.
Yet, the country's consumer price index rose only 1.3 percent in March.
Moreover, the strengthening Korean won, which hit a more than a three-year high against the U.S. dollar last week, further weakened inflationary pressure.
The governor has repeatedly said South Korea's monetary policy will remain accomodative.
But the central bank is under pressure to implement monetary tightening if the U.S. Federal Resereve hikes rates again in the latter half of this year, after the Fed rate hike in March already pushed U.S. borrowing costs above South Korea's for the first time in more than 10 years.
Kim Hyesung, Arirang News.