South Korea keeps interest rate at record low

GMT 07:29 2015 Thursday ,12 November

Arab Today, arab today South Korea keeps interest rate at record low

The decision by the Bank of Korea was widely expected
Seoul - AFP

South Korea's central bank on Thursday left its key interest rate unchanged at a record-low 1.5 percent for the fifth straight month ahead of a possible US rate hike.

The widely expected decision by the Bank of Korea was reached unanimously by its seven-member Monetary Policy Board, following a cut of 0.25 basis points in June.

The bank has cut its interest rate by a full percentage point in four stages since August last year.

The board forecast a continued recovery in the domestic economy, but said uncertainties surrounding the growth path remained "high".

It particularly highlighted a persistent slump in exports, which account for about half of South Korea's gross domestic product.

The board also voiced concern about the possible impact on the global economy -- especially emerging markets -- if hints by the US Federal Reserve of a December rate hike become a reality.

South Korea's economic growth reached a five-year high in the third quarter thanks to a strong rebound in domestic demand, following a slump caused by a deadly outbreak of Middle East Respiratory Syndrome (MERS) in May.

Asia's fourth-largest economy expanded by 1.2 percent in the July-September period, the fastest on-quarter growth since the second quarter of 2010, and up from just 0.3 percent in the April-June period.

The central bank said consumers had ventured back into shopping malls as the threat posed by the MERS outbreak receded.


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