Wednesday, 12 June 2013

Economic Buzz: Bank of Korea Keeps Rate On Hold

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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