SEOUL (AFP) – South Korea’s central bank on Thursday kept the key interest rate unchanged at 2.0 per cent for November, as its governor warned over a “worrisome” drop in the Japanese yen and its possible impact on exports.
The decision came after the Bank of Korea cut the overnight inter-bank lending rate in August and October.
The 2.0 per cent rate matches a record low last seen from February 2009 through June 2010, when Asia’s fourth-largest economy was seeking to recover from the global financial crisis.
Signs of slowing growth posed an increasing challenge to Seoul policymakers, with a weak yen hurting the price competitiveness of South Korean firms against Japanese rivals in overseas markets. In a statement, the BOK forecast that the global economy would “sustain its modest recovery going forward” but warned of destabilising variables.