BOK holds key interest rate steady at 2.25 pct for August

13:17, August 12, 2010      

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South Korea's central bank on Thursday froze its benchmark interest rate at 2.25 percent for August, after it hiked the key rate last month in a surprising move aimed at taming inflation. Following a monthly monetary policy meeting, the Bank of Korea ( BOK) kept the seven-day repo rate steady at 2.25 percent for the month, as largely expected by analysts here.

The bank last month raised the key rate from a record low of 2 percent after holding it steady for 16 months, in an effort to tackle mounting inflationary pressure as the country seeks an exit strategy from the global financial downturn.

South Korea has been faring relatively well in the face of lingering external economic uncertainties, backed by its strong exports and rising domestic demand. The central bank raised upward its forecast for the country's economic growth to 5.9 this year, up from the previous estimate of 5.2 percent. The BOK might increase the base rate as early as next month to further stem inflationary pressure, some analysts predicted.



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