At its April 10th, 2014 meeting, South Korea's central bank held the benchmark interest rate unchanged at 2.5 percent, as widely expected. Under new Governor Lee Ju-yeol, the Bank of Korea cited signs of recovery at home and abroad and uncertainty about the US Federal Reserve's stimulus.
Excerpt from the statement by the Bank of Korea:
In Korea indicators related to domestic demand have slumped temporarily, but as exports have shown buoyancy the Committee appraises the economic recovery to have continued in line with the trend of growth.
The Committee expects that the domestic economy will maintain a negative output gap for the time being going forward, although it forecasts that the gap will gradually narrow.
The Committee forecasts that inflation will gradually rise, although it will remain low for the time being due largely to a bountiful agricultural harvest. Regarding the housing market, the uptrends of sales and leasehold deposit prices in both Seoul and its surrounding areas and in the rest of the country increased slightly, due in part to the influence of the spring moving season.
Looking ahead, while paying close attention to developments in and the influences of external risk factors such as shifts in major countries’ monetary policies, the weakening of economic growth trends in some emerging market countries and geopolitical risks in Eastern Europe, the Committee will conduct monetary policy so as to keep consumer price inflation within the inflation target range over a medium-term horizon while supporting the continued recovery of economic growth.
4/10/2014 9:52:48 AM