BOK Keeps Rate Unchanged, Eyeing External Factors
Korea's central bank has decided to "wait and see" for a while, deciding at a monetary policy committee meeting at the end of the third quarter to keep its key interest rate frozen at three-percent while keeping an eye on the still-slumping global economy.
[Interview : Kim Choong-soo, Governor
Bank of Korea] "The global economy is recovering at a slower pace, particularly in the eurozone and the U.S.
Growth in developing countries has also been tamed by these trends, and we've decided to keep our policy for the time being."
But Kim added that things could change, with the European Central Bank having recently committed to buying a potentially unlimited amount of bonds and the possibility of an additional round of monetary easing from the U.S.
Still, the rate freeze came as a surprise as the market had been expecting another cut following the BOK's surprise rate cut in July.
Experts say there will be a new rate cut in the coming months as the Korean economy is decelerating quarter after quarter.
[Interview : Lee Myong-whal, Director of Macroeconomic & Int'l Finance
Korea Institute of Finance] "I'd say another rate cut is highly likely before the end of the year, as exports and other key indices are expected to dip even lower in the third quarter from the previous quarter."
[Reporter : Song Ji-sun
firstname.lastname@example.org] "With Korea's GDP growth slowing down to the 2-percent range in the second quarter and investment banks slashing their growth forecasts for Korea for this year Kim said whether the country will be able to achieve a growth rate in the 3-percent range will be determined by next month.
Song Ji-sun, Arirang News."
Reporter : email@example.com