Freeze the base rate at 3.5%… Economic growth rate down to 1.4% |

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Bank of Korea Governor Lee Chang-yong held a press conference on the direction of monetary policy at the Bank of Korea headquarters in Jung-gu, Seoul on the 25th. [사진=한국은행]


The Bank of Korea kept its benchmark interest rate unchanged. The economic growth rate forecast was reduced by 0.2 percentage points (p) from the original forecast (February, 1.6%).

The Bank of Korea held a monetary policy direction meeting of the Monetary Policy Committee at the Bank of Korea headquarters in Jung-gu, Seoul on the 25th and announced that it has decided to maintain the Bank of Korea base rate at the current level (3.50). %) until the next monetary policy direction is decided.

With this decision, the Bank of Korea’s benchmark interest rate will be maintained at 3.5% again following February and April.

Bank of Korea Governor Lee Chang-yong said at a press conference held immediately after the meeting that day, “Although inflation is slowing, it is expected to remain above the target level for a significant period of time , so it was deemed appropriate to maintain the current tightening stance.” he explained.

He added, “There is still uncertainty about the outlook linked to the slowdown in core inflation.”

Regarding the possibility of a rate cut within the year, he said, “It is premature to comment on the timing of a rate cut until there is evidence that prices are clearly converging to the 2% target level. “

Meanwhile, the Bank of Korea lowered its forecast for domestic economic growth this year to 1.4%. This is 0.2 percentage points lower than the forecast of 1.6% in February.

Governor Lee explained the reason for the downward revision of the growth rate, saying, “The impact of the recovery of the IT economy and the resumption of economic activity in China is being delayed more than originally expected.”

“From the second half of the year, it is expected that the growth of the domestic economy will gradually improve as these external conditions are somewhat alleviated, but there is great uncertainty about the timing of the IT business rebound, the extent of the ripple effect. of China’s economic recovery, and the economic flow of major developed countries.” he said.