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Bank of Korea keeps interest rates unchanged at 3.5%

Published 22/02/2024, 02:04
Updated 22/02/2024, 02:04
© Reuters.

Investing.com-- The Bank of Korea (BOK) left its benchmark interest rate unchanged on Thursday, as widely expected, with the central bank set to keep monetary policy restrictive until inflation is comfortably within its annual target.

The BOJ kept its benchmark base rate at 3.5% for a ninth straight meeting, largely in line with analyst expectations. The move comes even as South Korean inflation eased substantially in recent months.

But with consumer price index inflation remaining above the BOK’s 2% annual target, the bank is widely expected to keep policy restrictive in the coming months. A Reuters poll showed that analysts expect a rate cut only by the third quarter of 2024. 

A recent rebound in South Korean exports- which are a key growth driver- also pointed to resilience in the economy, which gives the BOK more headroom to keep policy restrictive. 

But the economy is still grappling with pronounced decline in manufacturing, while a housing market downturn and relatively high inflation also quashed private spending. 

 

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