Bank Of Korea Keeps Rate On Hold
(RTTNews) - The Bank of Korea left its benchmark rate unchanged on Thursday, following two consecutive quarter-point rate hikes and maintained a hawkish stance as inflation is expected to remain above the target level.
The seven-member monetary policy board unanimously decided to keep the base rate unchanged at 3.00 percent, as widely expected.
"... the Board will decide the timing and pace of further increases in the Base Rate while assessing trends in inflation and the domestic economy, as well as financial stability," the bank said in a statement.
The bank had lifted its base rate in July and August to prevent broadening of inflationary pressures.
The domestic economy continued to expand at a stronger pace, driven by robust growth in the semiconductor sector alongside strong exports and investment.
Inflation is expected to remain above the target level for a considerable time as the pass-through of elevated cost pressures persist and demand-side pressures also gradually intensify.
Consumer price inflation and core inflation are expected to be consistent with the August projections of 2.7 percent and 2.5 percent, respectively.
However, for the following year, both CPI and the core rates are expected to exceed previous forecasts of 2.3 percent and 2.5 percent, respectively.
Regarding financial stability, the board emphasized the need to monitor financial imbalance risks related to the housing market in Seoul and its surrounding areas as well as elevated household debt levels.
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