Korea: Central Bank keeps rates unchanged in September
September 12, 2013
At its 12 September monetary policy meeting, the Bank of Korea (BoK) left the base rate unchanged at 2.50% for the fourth consecutive month. The move was widely expected by the market.
The Central Bank indicated that slowing economic activity and mild inflation provide the Bank with sufficient room to keep the interest rate unchanged. The Central Bank expects inflation to remain low in the coming months, despite an increase in global oil prices. The BoK also expects the economy to continue to grow, albeit below potential.
The majority of Consensus Forecast panelists expect the Central Bank to maintain the base rate unchanged this year, with an average forecast of 2.67%. For 2014, panelists see the policy rate ending the year at 3.15%.
Author: Ricardo Aceves, Senior Economist