In order to assess the impact of previous rate hikes, South Korea’s central bank decided to hold its interest rate, bringing an end to the tightening cycle that began 18 months ago.
The Bank of Korea’s Monetary Policy Board decided to keep the Base Rate unchanged at 3.50 percent.
Since August 2021, the central bank has raised its policy rate by a total of 300 basis points, bringing it to its highest level since 2008.
“I don’t want today’s decision to be interpreted as the end of rate hikes,” said Bank of Korea Governor Rhee Chang-yong.
The governor previously stated that it was normal to pause after raising interest rates to assess the need for further increases.
“Today’s decision could be interpreted as a return to the previous way,” Rhee said.
The central bank reduced its growth forecast for 2023 to 1.6 percent from 1.7 percent, citing the global economic slowdown and interest rate increases.
Domestic economic growth is expected to improve gradually beginning in the second half of 2023, as the Chinese economy and information technology industry recover. Nonetheless, the outlook is judged to be fraught with uncertainty.
Source: RTT News
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