BOK freezes key rate at record low 1.25% for July

[THE INVESTOR] In a widely expected move, Korea’s central bank kept its base rate steady on July 14, one month after it was slashed to a record low of 1.25 percent to help bolster growth.

The Bank of Korea’s monetary policy board made a surprise rate cut in June after holding the key interest rate steady at 1.5 percent for 11 consecutive months in what many saw as a preemptive step to boost local spending, one of two major pillars of growth here.

In the January-June period, the country’s consumer prices gained only 0.9 percent from a year earlier, far short of the central bank’s 2-percent target for the year.

Exports, also a main growth engine, have fallen every single month since the start of last year.

In an earlier poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency, all 12 economists surveyed forecast a rate freeze in July, noting a need for the BOK board to gauge the effects of its latest rate cut.

(theinvestor@heraldcorp.com)