Bank of Korea Keeps Key Rate on Hold

South Korea’s central bank left its policy rate unchanged for a seventh month on Friday, reflecting caution about financial stability in the face of slowing growth.

The central bank said in a statement that it expects gross domestic product to grow by mid-2 percent this year, versus an October forecast of 2.8 percent. It said inflation would reach its 2 percent target by mid-year.

The Bank of Korea kept the seven-day repurchase rate at a record-low 1.25 percent, a decision expected by all 21 economists surveyed by Bloomberg.

“South Korea’s exports-driven economy, seen as a bellwether for global trade, was hit hard by a slowdown in China last year,” said Stephen Innes, Singapore-based senior trader at foreign-exchange company Oanda. “But with signs China’s economy is improving and global inflation is rising, there was less incentive for the BOK to cut rates.”

 

Bloomberg Markets

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Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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