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S. Korea holds base rate steady at 3.25%

02-10-2012 14:00 BJT

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Earlier in the Asian day, we had monetary policy decisions from central banks here. South Korea held its key policy interest rate steady at 3.25 percent for an eighth straight month as expected. That came as Asia’s fourth largest economy faces persistently high inflation and weak growth.

The Bank of Korea has left its key interest rate unchanged at 3.25 percent.

The decision is well within market expectations. South Korea’s central bank governor says he’s concerned over unstable inflation and the state of the world economy. US employment has shown some improvements, but economic activities in the euro area remain sluggish.

Kim Choong-Soo, governor of Bank of Korea said: "Going forward, the Bank of Korea’s monetary policy committee expects the pace of global economic recovery to be very moderate. Risk factors stemming from the eurozone debt crisis still exist."

He says global growth will slow as advanced economies cut spending. He adds that the Greek debt issue isn’t solely about Greece. How the problem is to be settled is very important to the financial markets.

Kim Choong-Soo said: "The importance of the problem regarding Greece is that it is not just an issue of Greece, but it is about how the matter is being solved in a certain way. And as all of you know it is being reflected on the international finance market, which is showing an improvement."

The Bank of Korea signaled policy is unlikely to change in coming months because it’s more worried by inflation risks than signs of slowing growth. Many economists have already revised forecasts for rate hikes or cuts in the benchmark rate this year.

 

Editor:Zhang Rui |Source: CNTV.CN

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