Korean Central Bank Leaves Benchmark Rate Unchanged


South Korea's central bank held its benchmark interest rate steady at 5.0 percent on Friday, as widely expected, pausing after two consecutive quarter-percentage point increases aimed at cooling rapid credit and money growth.

A press official at the Bank of Korea's media department informed reporters of the decision by its monetary policy committee, without elaborating. Governor Lee Seong-tae is expected to hold a news conference shortly.

All 11 economists in a Reuters poll had expected the central bank to hold interest rates steady and a majority of those surveyed predicted rates would remain unchanged for the rest of the year because of heightened global financial market uncertainty.

The central bank lifted its benchmark overnight call rate target by a total of 1.75 percentage points between October 2005 and August this year to cool rapid credit and money supply growth, which it has warned could stoke inflation.

Analysts expect the Bank of Korea to remain vigilant on inflation due to accelerating growth in Asia's fourth-largest economy.