Korea keeps base rate at 3¼% amid maintained pace of economic growth

By Toni Weeks

San Diego, March 8 - The Bank of Korea's Monetary Policy Committee again decided to maintain its base interest rate at 3¼%, according to a bank press release. The rate has remained unchanged since July 2011.

Despite the rise in petroleum product prices, consumer price inflation fell to 3.1% in February due to declines in the prices of livestock products. Core inflation also was lower.

In Korea, economic growth has been maintained, the bank said. Although construction has been sluggish, consumption and facilities investment have increased, and exports have shown a steady expansion.

Housing prices remained weak in Seoul and in surrounding areas. Stock prices rose, long-term market interest rates increased slightly, and the volatility of the Korean won exchange rate diminished, the release noted.

Elsewhere, employment has maintained its improvement in the United States, but economic activity in Europe has remained sluggish, the release said.

Emerging market economies continue to show signs of weakening, due mostly to slowing exports.

Going forward, the committee said it expects the pace of global economic recovery to be moderate, citing the risk factors of sovereign debt problems in Europe and geopolitical risks in the Middle East.

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