Bank of Korea holds key interest rate steady at 1.50%
- 5 years ago
한은, 8월 기준금리 1.50%로 동결
South Korea's central bank decided to freeze its key interest rate.
It's a widely expected move, however, the BOK also hinted at a future cut.
Kim Hyesung help us look beyond the digits.
The Bank of Korea on Friday kept its benchmark interest rate unchanged at 1-point-five percent .
This comes after the bank cut rates last month for the first time in three years.
The central bank said geopolitical risks such as a possible no-deal Brexit and global uncertainties ,... including the ongoing U.S.-China trade spat and Japan's export restrictions,... are continuing to weigh on the local economy.
"We cut 25 basis points last month, on concerns over growing downside risks to the Korean economy. At the current stage, we have decided to keep rates unchanged and futher examine how the external environment could affect Korea's real economy and the financial market."
The BOK chief said global and domestic financial markets are seeing an increase in volatility,... exacerbated by concerns of a global economic slowdown over the U.S.-China trade war.
Major economies' treasury yields have fallen.
The Korean won also continued to weaken, falling more than eight percent against the U.S. dollar this year to more than 12-hundred won against the greenback in August.
Domestically, consumer sentiment is at a 31-month low this month, and headline inflation remained below one percent through July, lower than the bank's two percent target.
Exports, a key driver of South Korea's domestic growth, is set to fall for the ninth-consecutive month in August on lower global demand.
"Construction and investment remains sluggish, and consumption is also starting to fall. The economic environment for the latter half of this year is even worse than the first half. This calls for more monetary easing, but the central bank is waiting to see the effects of the rate cut and extra budget spending.
In fact, the Bank of Korea said it will closely monitor household debt, domestic financial markets and monetary policy in major economies,... before arriving at its monetary policy decisions.
"In Friday's meeting, two out of seven board members voted for a rate cut, and markets expect the bank to cut rates in October or December this year."
Kim Hyesung, Arirang News.
South Korea's central bank decided to freeze its key interest rate.
It's a widely expected move, however, the BOK also hinted at a future cut.
Kim Hyesung help us look beyond the digits.
The Bank of Korea on Friday kept its benchmark interest rate unchanged at 1-point-five percent .
This comes after the bank cut rates last month for the first time in three years.
The central bank said geopolitical risks such as a possible no-deal Brexit and global uncertainties ,... including the ongoing U.S.-China trade spat and Japan's export restrictions,... are continuing to weigh on the local economy.
"We cut 25 basis points last month, on concerns over growing downside risks to the Korean economy. At the current stage, we have decided to keep rates unchanged and futher examine how the external environment could affect Korea's real economy and the financial market."
The BOK chief said global and domestic financial markets are seeing an increase in volatility,... exacerbated by concerns of a global economic slowdown over the U.S.-China trade war.
Major economies' treasury yields have fallen.
The Korean won also continued to weaken, falling more than eight percent against the U.S. dollar this year to more than 12-hundred won against the greenback in August.
Domestically, consumer sentiment is at a 31-month low this month, and headline inflation remained below one percent through July, lower than the bank's two percent target.
Exports, a key driver of South Korea's domestic growth, is set to fall for the ninth-consecutive month in August on lower global demand.
"Construction and investment remains sluggish, and consumption is also starting to fall. The economic environment for the latter half of this year is even worse than the first half. This calls for more monetary easing, but the central bank is waiting to see the effects of the rate cut and extra budget spending.
In fact, the Bank of Korea said it will closely monitor household debt, domestic financial markets and monetary policy in major economies,... before arriving at its monetary policy decisions.
"In Friday's meeting, two out of seven board members voted for a rate cut, and markets expect the bank to cut rates in October or December this year."
Kim Hyesung, Arirang News.