Korea: Central Bank holds rates
January 11, 2013
At its 11 January monetary policy meeting, the first one of the year, the Bank of Korea (BoK) left the Base Rate unchanged at 2.75%. The non-unanimous decision was in line with market expectations.
In the accompanying statement, the Bank noted that "the negative output gap in the domestic economy will persist for a considerable time", mostly due to sluggish economic activity in the Euro area and a weak recovery in the United States. Regarding price developments, the Bank expects inflation to remain within the 3.0% target for the time being amid easing demand-side pressures.
The bank hinted to a possible rate cut in the coming months if global conditions hamper economic activity in the export-led country. In addition, the bank cut its growth and inflation forecast for this year in its 2013 Economic outlook.