- FDIC's Bair Cautions on Risks in Bank Break-Up Plan
- Wednesday's Economic News Crunch Could Tilt Markets
- Call Me Crazy: Confessions of a Black Friday Shopper
- US Firms Hit by Payroll Taxes at Exactly the Wrong Time
- Citi Mortgage Reveals Something the US Treasury Won't
- Fed Sanguine About US Recovery, Worried on Jobs
- Amended Berkshire Filing Reveals No 'Secret' Holdings
- Holiday Guide to This Season's Smartphones
- In Time for Holidays: More Gloom and Doom on Economy
- Citi Mortgage Reveals What Treasury Won't
- S&P to Hit 1,200 by Year-End: Chief Investor
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Facebook's Biggest-Ever Holiday Shopping Season
- Facebook's New Dual Class Structure - Slow Steps to an IPO
- 5 Big Bank Stocks Investors Should Consider: Strategists
- Gambling Drunk, Texting to Live And America's On Sale - Your Emails
- Nov. 24: Unusual Volume Leaders
- NBA D-League On The Rise
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Wednesday's Economic News Crunch Could Tilt Markets
- NBA D-League On The Rise
- Obama Reiterates Commitment to Boost US-India Ties
- Australia Wheat Exporters Face Challenges: GrainCorp
- Japan Export Rebound Eases Fear of New Recession
- Trading Block
- Confessions of a Black Friday Shopper
- Stifling Anger at Work Can Kill, Survey Finds
- China Shipbuilding to Launch $937 Million China IPO
Text Size 
South Korea's central bank held interest rates steady at a record low for a fifth consecutive month on Thursday, in a widely expected move to support an only nascent recovery in Asia's fourth-largest economy.
 |
CNBC.com |
A media officer at the Bank of Korea informed reporters of the monetary policy committee's decision to keep the base rate unchanged at 2.0 percent, without elaborating. Governor Lee Seong-tae is due to hold a news conference later Thursday.
The central bank said in a statement that future inflation pressures could rise due to oil prices and that while the economy remained on a recovery trend uncertainties persisted.
Bond futures and stock prices held firm as investors bet the comment on inflation indicated no change from central bank's previous stance and that renewed doubts about the global economy's health would persuade the Bank of Korea to stand pat for an extended period.
The decision came hours after leaders of the Group of Eight industrial nations agreed in a meeting in Italy that the global economy's recovery was not yet assured and that it is too soon to unwind economic growth packages.
Analysts said low inflation and doubts about the economy would allow the Bank of Korea to refrain from shifting its monetary policy toward a tightening mode any time soon, although a recovering property market could emerge as a concern.
"Inflation pressures would not flare up quickly given the base effect, but rebounding property prices could be a headache for the central bank," said Jun Min-kyu, an economist at Korea Investment & Securities.
"I believe the central bank will begin to raise rates in December as the current level is extremely low. It is expected to adjust the rates to 3 percent at a gradual pace."
All 12 analysts surveyed by Reuters were unanimous in forecasting the Bank of Korea would hold the 7-day repurchase agreement rate steady after six reductions totaling 3.25 percentage points since October.
More From CNBC.com
- China-Australia Spy Case Fans Fears, Hits Aussie Dollar
- Australia Jobless Numbers Rise Less than Feared
- China Think-Tank Sees Economic Growth in 2009 Near 8%
- IMF Sees 2010 Growth, G8 Frets Over Risks
- More Asia Pacific News
But speculation has been increasing among investors and analysts that central banks in several Asian economies on a faster recovery could start to tighten up their policy even before the U.S. Federal Reserve changes its own.
The South Korean government and global investment banks have upgraded their forecasts on the country's economic growth for this year, citing an earlier and more solid recovery in exports and domestic demand than initially thought.
Print
Email
- Remember when auto shows were major events where new models could generate buzz?
- CNBC’s Mike Huckman visits a cutting-edge plant to see how the flu vaccine of the future is being made.
- People who bottle up their anger at work are up to five times more likely to suffer a heart attack, a study found.
- Playboy will outsource its publishing operations in a bid to become profitable again.
- A new McDonald's in Manhattan is the nation's first to sport a sleek, chic interior imported from stores in London and Paris.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
Data is a real-time snapshot *Data is delayed at least 15 minutes