South Korea’s central bank froze its key rate at 3.5 percent for the 12th straight session Thursday.
The Bank of Korea (BOK) has continued to stand pat following rate freezes since February last year after delivering seven consecutive rate hikes from April 2022 to January 2023.
The rate freeze came as household debt runs high despite an extended restrictive mode and inflationary pressure in Asia’s fourth-largest economy showing signs of easing, while the country’s economy is expected to grow faster than expected this year on the back of robust exports, South Korea’s (Yonhap) news agency said.
Household loans extended by banks in South Korea rose for the third consecutive month in June, led by a rise in mortgage loan growth, which makes the central bank remain cautious about cutting the rates.
Consumer prices rose 2.4 percent on-year in June, the lowest level since July 2023, and the central bank is expecting inflation to fall further down the road, reaching its mid- to long-haul target rate of 2 percent b
y the end of this year.
The rate freeze also came as the central bank heightened its growth projection for the year.
Source: Qatar News Agency