The Bank of Korea retained its benchmark rate for a six consecutive month, waiting for Federal Reserve’s interest rate hike and evaluate its effects on the global economy and markets.
The benchmark seven-day repurchase rate was kept at 1.5%. Earlier this month, South Korea’s economy grew better than projected, while inflation climbed at its fastest.
South Korean policymakers, referring to their decision, were concerned about the prospective capital outflow from emerging markets, which could lead to financial market uncertainty and worsen slowdown woes.
However, Governor Lee Ju-yeol previously said he was not too worried about the implications of a rate increase, including capital moving from emerging to developed markets, as well as increase in bond yields.
The material has been provided by InstaForex Company – www.instaforex.com