1st LD: S.Korea freezes policy rate at 1.75 pct on worry about economic slump

0 Comment(s)Print E-mail Xinhua, May 31, 2019
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SEOUL, May 31 (Xinhua) -- South Korea's central bank left its policy rate unchanged Friday, keeping a wait-and-see stance since November last year on worry about economic slump.

Bank of Korea (BOK) Governor Lee Ju-yeol and six other policy board members decided to freeze the benchmark seven-day repurchase rate at 1.75 percent.

It was in line with market expectations. According to a Korea Financial Investment Association (KFIA) survey of 200 fixed-income experts, 97 percent predicted a rate on freeze.

The BOK refrained from altering the rate since the bank raised its target rate by a quarter percentage point to 1.75 percent last November. In November 2017, the bank lifted the benchmark rate to 1.50 percent from an all-time low of 1.25 percent.

The wait-and-see position came amid the rising concern about economic slowdown, caused mainly by the continued fall of export that accounts for about half of the South Korean economy.

The outbound shipment kept sliding for five months through April on the downturn in business cycle of the global semiconductor sector and the global economic slump.

The export outlook dimmed amid the global trade dispute. The export during the May 1-20 period posted a double-digit reduction compared with the same period of last year.

Influenced by the export slump, the real gross domestic product (GDP), adjusted for inflation, contracted 0.3 percent in the January-March quarter from the previous quarter.

The BOK revised down its 2019 growth outlook for the economy to 2.5 percent last month from 2.6 percent three months earlier, lower than the government's forecast of 2.6-2.7 percent. Enditem

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