Korea’s central bank is expected to stand pat on its key interest rate in the first quarter as murky economic situations and a membership transition in the rate-setting committee is likely to spur a wait-and-see stance, analysts said Friday.
The benchmark seven-day repo rate currently stands at 3.25 percent after the Bank of Korea froze the rate for the seventh consecutive month in January, citing increasing downside growth risks stemming from the eurozone debt crisis.
The forecast contrasts with earlier projections for a rate cut amid mounting concerns over domestic economic data and lingering global uncertainty.
In January, the country’s exports slumped 6.6 percent on-year to $41.53 billion, falling for the first time in 27 months. The trade balance also swung to negative territory, posting a deficit of $1.95 billion.
Despite bleak circumstances, analysts said a rate cut is unlikely amid the public’s elevated inflation expectations and political desire to win the hearts of voters.
(Yonhap News)
