S. Korea's Central Bank to Hold Key Rate for 13th Month
Date
6/10/2014 4:20:58 AM
(MENAFN- Qatar News Agency) Oul june 10 (qna) - south korea's central bank is forecast to freeze the key interest rate for the 13th straight month in june as the local Economy continues to show signs of recovery amid lingering uncertainties a poll showed tuesday.
all 18 analysts surveyed by the financial south korea's news agency (yonhap) infomax projected the bank of korea (bok) to keep the benchmark seven-day repo rate steady at 2.5% at an upcoming rate-setting meeting.
the bok is set to hold its monthly policy session on thursday with market watchers expecting the bank to extend its stand-still pose to another month.
the previous record stands at 16 months when the bok froze the key rate from march 2009 to june 2010.
analysts said the bank is likely to sustain its approach as macroeconomic circumstances solid exports tame inflation and weak demand have little changed since the previous meeting.
"we expect rates to be kept on hold in june as the pace of domestic demand recovery is not solid yet while inflation pressure remains muted" said credit suisse economist christiaan tuntono.
south korea's consumer prices rose 1.7% on-year in may logging the fastest on-year increase since october 2012. but they still ran below the bok's inflation target band of 2.5% to 3.5%.
of the surveyed analysts 11 expected the bank to leave the key rate unchanged until next year.
"rate hike talks may emerge in the fourth quarter. however given the low inflation continued growth and economic uncertainties the central bank is unlikely to raise the rate this year" said park hyuk-soo an economist at daishin economic research institute.
four analysts forecast the bok will raise the borrowing costs by a quarter percentage point later this year while two expected a quarter percentage point rate cut according to the survey. (qna)
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