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

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes