Bank of Korea holds key interest rate steady at 1.75% for May
- 5 years ago
As widely expected, South Korea's central bank kept its key rate steady at its monetary policy meeting held earlier today.
Kim Hyesung reports.
The Bank of Korea on Friday kept its benchmark interest rate unchanged at 1-point-75 percent .
This marks the fourth straight rate freeze after it raised its key rate by a-quarter-of-a-percent last November.
Sluggish domestic economic data have put pressure on the central bank to cut rates and help boost the economy, but growing external uncertainties over the U.S.-China trade dispute and concerns over possible capital flight prompted the BOK to hold rates steady.
The South Korean won has weakened more than five percent in the last three months to near 12-hundred won against the greenback, the worst performer in Asia....so cutting rates too soon could knock the won even lower, creating capital flight risks.
Exports, a key driver of South Korea's domestic growth, have fallen for five straight months since December on lower global demand.
For the first 20 days in May, exports tumbled 12 percent on-year, with chip sector shipments plunging 22 percent, set for a sixth straight month of decline.
The local economy contracted zero-point-three percent in the first quarter of 2019 on falling exports and investment, the slowest growth since the 2008 global financial crisis.
Headline inflation remained at around zero-point-five percent through April, lower than the central bank's two percent target and its forecast of 1-point-one percent for this year.
Kim Hyesung, Arirang News.
Kim Hyesung reports.
The Bank of Korea on Friday kept its benchmark interest rate unchanged at 1-point-75 percent .
This marks the fourth straight rate freeze after it raised its key rate by a-quarter-of-a-percent last November.
Sluggish domestic economic data have put pressure on the central bank to cut rates and help boost the economy, but growing external uncertainties over the U.S.-China trade dispute and concerns over possible capital flight prompted the BOK to hold rates steady.
The South Korean won has weakened more than five percent in the last three months to near 12-hundred won against the greenback, the worst performer in Asia....so cutting rates too soon could knock the won even lower, creating capital flight risks.
Exports, a key driver of South Korea's domestic growth, have fallen for five straight months since December on lower global demand.
For the first 20 days in May, exports tumbled 12 percent on-year, with chip sector shipments plunging 22 percent, set for a sixth straight month of decline.
The local economy contracted zero-point-three percent in the first quarter of 2019 on falling exports and investment, the slowest growth since the 2008 global financial crisis.
Headline inflation remained at around zero-point-five percent through April, lower than the central bank's two percent target and its forecast of 1-point-one percent for this year.
Kim Hyesung, Arirang News.