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Bank of Korea keeps rates at record low of 1.75%

by ChemOrbis Editorial Team -
  • 15/05/2015 (10:28)
According to media reports, the Bank of Korea (BOK) kept its key interest rates stable at a record low of 1.75% for a second consecutive month on May 15. The BOK had cut its policy interest rate by 25 basis points to all time low of 1.75% in March in order to boost economic growth and ease deflation risks stemming from the strengthening won. The bank’s decision to keep rates unchanged was in line with analysts’ forecasts.

Analysts commented that the central bank is exhibiting a wait-and-see mode to see the effects of its previous rate cuts as the economy has showed signs of improving. In the first quarter, South Korea’s gross domestic product (GDP) grew 0.8% after expanding 0.3% in the last quarter of 2014.

In March, the central bank lowered its 2015 growth outlook to 3.1% from its previous forecast of 3.4% while the country’s finance ministry predicts a stronger growth rate of 3.8% this year as the ministry reportedly stated that the economy has shown signs of improving recently on the back of low oil prices and higher housing prices. In April, the housing market in South Korea expanded 0.4% on the month.
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