Bank of Korea Maintains a 2% Bank Rate
September 10, 2009
South Korea’s central bank rate will stay at 2.0% as expected. A statement was released that depicts a recovery supported by both exports and domestic demand. Uncertainly persists. The statement calls policy “accommodative” and notes that CPI inflation and real estate prices are higher while credit market concerns have moderated. The Bank of Korea made news mostly in side comments from officials that noted policy would still be construed as easy even if rates were to move up. The Bank of Korea is likely to be among the first central banks to begin normalizing rates. The benchmark interest rate was earlier cut by twice last October by a total of 100 basis points, cut again on December 4 by 175 basis points, and reduced one final time in mid-February of this year to a final 50 basis points to 2.0%.
Copyright Larry Greenberg 2009. All rights reserved. No secondary distribution without express permission.
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