Bank of Korea

March 10, 2016

The South Korean central bank’s seven-day repo rate was left at 1.50%, its level since a 25-basis point reduction in June 2015.  There had been five earlier 25-bp cuts in November 2012, May 2013, August 2014, October 2014 and March 2015. 

A statement released after this month’s meeting of the Monetary Policy Board observes that while U.S. growth is poised to improve, the trend of economic recovery in the euro area has weakened somewhat, while economic growth in emerging market countries including China has continued to slow.”  A path of domestic demand-led expansion is projected to continue in South Korea, but in view of external economic conditions “the uncertainties surrounding the growth path are high.”  South Korean inflation rose in January but remains below target; looking ahead, “the Board forecasts that consumer price inflation will continue at a low level, due mainly to the low oil prices.”  To guide future policy, officials plan to “closely monitor external risk factors such as any changes in the monetary policies of major countries or in financial and economic conditions in China, the movements of capital flows, geopolitical risks, and the trend of increase in household debt.”

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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