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South Korea maintains key rate, cuts growth forecast for 2015

by ChemOrbis Editorial Team -
  • 15/01/2015 (14:32)
The Bank of Korea (BOK) kept its benchmark interest rates unchanged at a record low of 2% for December, in line with expectations. The bank last cut its key rate from 2.25% to 2% in October.

Following the rate decision, the bank also lowered its inflation and economic growth estimates for 2015. The BOK cut its growth forecast from 3.9% to 3.4% for this year. In October the bank had lowered its growth forecast to 3.9% from a previous estimation of 4% because of slowing domestic demand and lower exports. In addition, the central bank predicted that inflation would ease to 1.9% from a previous estimate of 2.4%.

In December, South Korea’s exports rose 3.7% on the year to beat economists’ estimates, which called for a 0.1% increase in a survey by Bloomberg. In November, the country’s factory output decreased 3.4% to post the biggest drop since January 2014.
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