South Korea freezes interest rates at record low of 1.25 percent

South Korea’s central bank on Thursday froze its benchmark interest rate at a record-low level amid mixed signals at home and abroad, including recovering exports and slumping consumption.

interest ratesinterest ratesBank of Korea (BOK) Governor Lee Ju-yeol and six other policy board members decided to keep the seven-day repurchase rate on hold at 1.25 percent, the lowest ever facing the South Korean economy. The rate has stayed in the level since June last year.

The decision was in line with market expectations. According to a Korea Financial Investment Association survey of 200 fixed-income experts, 99 percent of respondents had expected the rate freeze.

Economic indicators showed mixed signals. Exports, which account for about half of the economy, advanced 11.2 percent in January from a year earlier, keeping a double-digit growth momentum through the Feb. 1-20 period.

Concerns, however, remained about the country’s exports amid global economic slowdown and uncertainty about the new U.S. government’s trade policy, which is forecast to lean toward protectionist moves.

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Private consumption got lackluster amid the unabated political unrest, caused by a corruption scandal embroiling President Park Geun-hye that led to Park’s impeachment.

Consumers refrained from spending money on political uncertainty as seen in the December retail sales that shed 1.2 percent compared with the previous month. Enditem

Source: Xinhua/

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