Bank of Korea Froze Key Interest Rate for Seven Consecutive Months

The Bank of Korea held a Monetary Policy Committee meeting on December 12 and froze the key interest rate at 2.50%. 

The decision is based on the central bank’s judgment that the Korean economy is on a recovery track. Still, the pace of growth in consumer spending and capital expenditure is rather slow for now. The growth rate vis-à-vis the GDP was 1.1% during both the second and third quarters. 

External and internal conditions do not allow an adjustment of the benchmark interest rate, either. The Federal Reserve is planning to have an FOMC meeting between December 17 and 18 to discuss the tapering of quantitative easing. Domestically, issues such as household debt and insolvent enterprises have to be tackled as well.