The Bank of Korea held its benchmark interest rate steady for a fifth consecutive meeting as it seeks to rein in inflation while also avoiding adding pressure on an economy that faces headwinds ranging from risks of a debt crisis to slumping exports.
The central bank kept its seven-day repurchase rate at 3.5% on Thursday as forecast by all 18 economists surveyed by Bloomberg. The BOK has stood pat since last raising the rate in January, and Governor Rhee Chang-yong may retain his hawkish tone when he speaks to the media shortly.“The status quo is the best way to go for the time being,” said Kim Sung-soo, a fixed-income analyst at Hanwha Investment & Securities Co.
After the meeting, the central bank released inflation and growth forecasts for the current year that were unchanged from previous estimates, saying it still expects the economy to expand by 1.4% and consumer prices to rise by 3.5%. It trimmed its 2024 GDP growth forecast to 2.2%. The won has been among the weakest performers in Asia this month. Its deterioration against the dollar was a key reason the BOK raised the rate at a faster-than-usual pace in the second half of last year.
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