UPDATE 1-S.Korea c.bank holds rates, bonds edge lower
(Adds comments, details)
* Base rate kept at 2.75 pct (Reuters poll: 2.75 pct
* Governor Kim due to hold news conference from 0220 GMT
* Analysts see rate cut ahead as economy stagnates
SEOUL, March 14 (Reuters) - South Korea's central bank held interest rates steady for a fifth straight month on Thursday, a move that was broadly expected as it evaluates economic conditions overseas and heightened tensions with North Korea.
The Bank of Korea's monetary policy committee held its base rate steady at 2.75 percent, a media official said without elaborating. Governor Kim Choong-soo is due to hold a news conference from 11:20 a.m. (0220 GMT).
However, local bonds turned lower following the rate decision as some investors unwound bets for a cut. Lead March futures on three-year treasury bonds were down 0.04 points at 106.66 after trading as high as 106.80 earlier in the day.
A survey conducted by Reuters prior to the rate decision showed 17 out of 24 analysts forecasting the central bank to hold rates, while the remaining seven saw a cut. However, chances for another cut soon have expanded as uncertainty persists.
"Improvements in economic data suggest that growth remains on track for a recovery this year," said Ronald Man, an economist at HSBC in Hong Kong.
"However, uncertainty is high with a political gridlock at home and key issues in the U.S. to be addressed by the end of the month."
The Bank of Korea has been caught in a wait-and-see mode since last year as the South Korean economy has mostly suffered from elements beyond its control.
Many local analysts have said the central bank would cut rates early in the year to align policies with the new Park Geun-hye administration, which has been delayed in beginning its official tasks due to political gridlock in Parliament.
"When the new government's fiscal policy becomes clear, only then will the Bank of Korea decide whether to move rates," said Lee Chul-hee, chief economist at Tong Yang Securities in Seoul.
"However, the government right now does not have that capacity."
The central bank also has U.S. budget cuts, known as sequestration, to consider among future uncertainties, although the American economy has been showing signs of improvement as jobs data from last month fared better than expected.
Meanwhile, North Korea persists as a risk factor as it ramped up threats this month to strike the U.S. and South Korea in the face of expanded sanctions from the United Nations Security Council.
(Editing by Ken Wills)