South Korea's central bank held its key interest rate steady for the fifth straight time on Thursday as it weighs a slowdown in growth amid moderating inflation.
According to Yonhap News Agency, the monetary policy board of the Bank of Korea (BOK) kept the benchmark seven-day repo rate unchanged at 3.5%.
This marked the fifth straight time that the BOK has stood pat following rate freezes in February, April, May and July. The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023.
The central bank said inflation has slowed, but it will likely pick up again later this year, hovering above its target level for a considerable time.
Asia's fourth-largest economy is facing the prospect of slowing down in the face of growing economic risks in China, the country's largest trading partner, and an extended slump in outbound shipments amid easing inflationary pressure.
The central bank maintained its growth outlook for the year at 1.4%. In May, the bank cut its growth projection for Asia's fourth-largest economy to 1.4% from the 1.6% predicted three months earlier.
Given the growing uncertainties, the central bank cut its growth projection for next year to 2.2% from May's 2.3%.
South Korea's economy grew at a slightly faster pace of 0.6% in the second quarter of this year than three months earlier despite a slump in exports. In the first quarter, the economy expanded 0.3% following a 0.3% contraction.
Last year, the country's economy grew 2.6%, slowing from a 4.1% advance in 2021 and marking the slowest pace since 2020, when the economy contracted 0.7% amid the fallout from the coronavirus pandemic. (QNA)
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