Korea: Central Bank maintains wait-and-see approach
August 9, 2012
At its 9 August monetary policy meeting, the Bank of Korea (BoK) left the Base Rate unchanged at 3.00%, as monetary authorities evaluate the latest developments on the European debt crisis. The decision, which was widely expected by the market, came after July's surprise cut, which marked the first rate cut since February 2009. In the accompanying statement, the BoK stressed the sluggishness of the Euro area economies, in addition to signs of moderation in emerging markets and a weak recovery in the United States. Against this backdrop, the Bank reiterated that the domestic economy will sustain a negative output gap for a considerable time going forward, due mostly to the increase in Euro area risks and the sluggish economies of its major trading partners.