South Korea Holds Interest Rates as Expected

South Korea's central bank held its main interest rate steady at 5.0 percent for the third month in a row on Thursday, as widely expected, amid turbulent global markets and despite growing inflationary pressures.

It had raised the overnight call rate target by a quarter of a percentage point each in July and August to a six-year high, lifting the rate target for a total of seven times since the current tightening cycle started in October 2005.

A media officer at the Bank of Korea 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 10 economists in a Reuters poll had expected the central bank to hold interest rates this week. Five of those surveyed predicted rates could rise in the first half of next year.

Government and central bank officials have recently said South Korea's consumer price inflation would accelerate in the coming months on stubbornly high oil prices and as Asia's fourth-largest economy keeps expanding.

Government data showed last week the consumer price index in October rose 3.0 percent from a year earlier, marking the fastest annual pace in 29 months and picking up from a 2.3 percent rise in September.