Bank of Korea holds key interest rate steady at 1.75%
- 5 years ago
한은, 기준금리 6개월째 동결…연 1.75%
The nation's central bank kept its key rate steady.
The widely expected decision was reached after its monetary policy meeting earlier today.
Kim Hyesung help us look beyond the digits.
The Bank of Korea on Friday kept its benchmark interest rate unchanged at 1-point-75 percent.
In a vote of six-to-one, the seven member monetary policy board decided to freeze the rate for the fourth straight meeting, keeping a wait and see stance since last November.
"Since April, the pace of global economic growth has continued to slow, including growth in China, Japan and Europe. Volatility in the global financial markets has increased amid rising U.S.-China trade tensions. Stocks in major countries have fallen while the currencies of emerging economies have depreciated substantially."
On slowing global demand, exports, a key driver of South Korea's domestic growth, have fallen for five straight months since December on slowing global demand.
For the first 20 days in May, exports tumbled 12 percent on-year,... and chip sector shipments are heading for a sixth straight month of decline after plunging 22 percent.
Falling exports and investment caused GDP growth to contract zero-point-three percent in the first quarter, the worst quarterly figures 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.
"Despite sluggish domestic economic data, the Bank held rates due to growing financial market volatility, The South Korean won has depreciated rapidly in recent months. A cut in interest rates could further drive down the value of the won, resulting in a capital outflow. The central bank will likely wait until second quarter economic indicators come out before changing rates."
At the same time, household debt, which has seen its growth slow in recent months, is still the size of Korea's GDP of 1-point-three trillion U.S. dollars, another reason why the BOK opted to keep rates unchanged.
"The Bank of Korea said it will maintain its accommodative monetary policy stance to support the domestic economy, and added that it will carefully monitor the U.S.-China trade dispute as well as paying close attention to the country's financial stability.
Kim Hyesung, Arirang News.
The nation's central bank kept its key rate steady.
The widely expected decision was reached after its monetary policy meeting earlier today.
Kim Hyesung help us look beyond the digits.
The Bank of Korea on Friday kept its benchmark interest rate unchanged at 1-point-75 percent.
In a vote of six-to-one, the seven member monetary policy board decided to freeze the rate for the fourth straight meeting, keeping a wait and see stance since last November.
"Since April, the pace of global economic growth has continued to slow, including growth in China, Japan and Europe. Volatility in the global financial markets has increased amid rising U.S.-China trade tensions. Stocks in major countries have fallen while the currencies of emerging economies have depreciated substantially."
On slowing global demand, exports, a key driver of South Korea's domestic growth, have fallen for five straight months since December on slowing global demand.
For the first 20 days in May, exports tumbled 12 percent on-year,... and chip sector shipments are heading for a sixth straight month of decline after plunging 22 percent.
Falling exports and investment caused GDP growth to contract zero-point-three percent in the first quarter, the worst quarterly figures 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.
"Despite sluggish domestic economic data, the Bank held rates due to growing financial market volatility, The South Korean won has depreciated rapidly in recent months. A cut in interest rates could further drive down the value of the won, resulting in a capital outflow. The central bank will likely wait until second quarter economic indicators come out before changing rates."
At the same time, household debt, which has seen its growth slow in recent months, is still the size of Korea's GDP of 1-point-three trillion U.S. dollars, another reason why the BOK opted to keep rates unchanged.
"The Bank of Korea said it will maintain its accommodative monetary policy stance to support the domestic economy, and added that it will carefully monitor the U.S.-China trade dispute as well as paying close attention to the country's financial stability.
Kim Hyesung, Arirang News.