The
Bank of Korea left its benchmark interest rate at 2.50%, following a
surprise rate cut in May. The central bank said it will aim monetary
policy at improving economic growth potential, and named the U.S.'s
possible withdrawal of its extraordinary monetary easing as a key
downside risk.
The uncertainties related to the possibility of an
earlier-than-expected tapering off of U.S. quantitative easing policy
and the implementations of fiscal consolidation in major countries
remain as downside risks to growth, the BOK said in a statement after
its monthly policy review earlier in the day.
The bank said it
expects the Korean economy to maintain its modest uptrend in line with
the gradual recovery of the global economy. But it said the Japanese
yen's heightened volatility, and possible domestic production setbacks
due to an expected shortfall in power supply following the suspension
last month of two nuclear reactors, are posing threat to growth.
The
BOK said it will closely monitor changes in external risk factors. It
will conduct monetary policy focused on keeping consumer price inflation
within a target range over a medium-term horizon, and on ensuring
growth potential isn't eroded by current slowing growth.
Source by Commodity Insights
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