Bank of Korea leaves base interest rate unchanged at 2%

By Richard Connell

New York, June 10 - The Monetary Policy Committee of the Bank of Korea left its base interest rate unchanged at 2% at its meeting on Thursday, according to a news release issued by the bank.

The committee pointed out that while emerging market economies have continued their favorable performance supported by the major advanced economies, risks still existed due to the debt problems in certain eurozone nations.

The committee also noted that the domestic economic activity in Korea appears to have been maintained, led by increased exports, but noted domestic consumption and investment have faltered temporarily.

Consumer price inflation accelerated slightly, led by petroleum prices, and looking forward the committee believes the upward trend of economic activity will increase demand-pull pressure.

Finally, the committee noted that the increase in geo-political risks concerning the Korean peninsula had led to increased volatility in both stock prices and currency exchange rates.

The committee has now left the rate at 2% for 16 consecutive meetings dating back to February 2009.

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