Korea: Central Bank stays put in latest meeting
December 12, 2013
At its 12 December monetary policy meeting, the Bank of Korea (BoK) decided to maintain the base rate unchanged at 2.50%. This is the seventh consecutive meeting in which the Bank decided to keep the rates on hold. The move was in line with market expectations. In its statement, the BoK underlined that economic activity is healthy and that the growth trend remains positive. Nonetheless, monetary officials acknowledged that a certain level of slack in the economy will persist in the coming months, although the output gap is expected to narrow. Regarding price developments, the Central Bank stated that it expects inflation to remain at low levels for now, primarily due to lower global commodity prices. The majority of Consensus Forecast panelists expect the Central Bank to maintain the base rate unchanged this year, with an average forecast of 2.50%. For 2014, panelists see the policy rate ending the year at 2.68%.
Author: Ricardo Aceves, Senior Economist