At the monetary policy meeting held on 8 September, the Bank of Korea (BoK) kept the Base Rate unchanged at 3.25%, in a decision that was in line with market analysts' expectations. The BoK refrained from raising rates for a third consecutive meeting, after tightening the policy reins in June. At the current 3.25%, the policy rate is at its highest level since November 2008. According to analysts, external factors heavily influenced the BoK decision to keep rates unchanged. The BoK stated that slower growth in major economies, the sovereign debt crisis in Europe and volatility in financial markets add downward risks to the global outlook and increase the uncertainty regarding the growth path of the export-dependent Korean economy. Meanwhile, inflationary pressures remain strong, with inflation increasing from 4.7% in July to 5.3% in August on the back of rising prices for agricultural products. However, according to the BoK, agricultural prices are expected to stabilize in the coming months, thus easing pressure on prices going forward. In the statement accompanying the decision, the BoK reiterated that it will conduct its monetary policy with a ?greater emphasis? on ensuring price stability in the coming months. However, according to market analysts, the continued reference to external downside risks implies that the BoK will keep interest rates on hold for the rest of the year.
Korea Monetary Policy
Central Bank leaves rates on hold as global slowdown threatens growth
September 8, 2011
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Korea Economic News
October 25, 2016
The Korean economy slowed down in the third quarter of this year, expanding at the weakest pace in over a year.
October 13, 2016
At its 13 October monetary policy meeting, the Bank of Korea (BoK) announced that it will hold the base rate constant at a record low of 1.25%, which was largely in line with market expectations.
October 5, 2016
In September, consumer prices rose 0.6% over the previous month, which contrasted the 0.1% decrease in August and overshot the 0.2% increase the markets had expected.
October 3, 2016
Korea’s Customs Services reported that exports totaled USD 40.9 billion in September, which represented a 5.9% contraction over the USD 43.4 billion recorded in the same month last year.
September 30, 2016
The forward-looking business confidence indicator (BSI) for the manufacturing sector produced by the Bank of Korea (BoK) rose from 74 points in September to 75 points in October.