SEOUL- South Korea’s central bank said on Friday greater uncertainty on the inflation outlook and the strength of exports argued against a near term push to cut interest rates after the bank left the policy rate steady at a 15-year high.
“To give a six-month ahead outlook or so, all of the board members including myself deem it’s difficult to make a call on the possibility of a rate cut for the second half,” Bank of Korea Governor Rhee Chang-yong said in a post-policy news conference after keeping its key rate at 3.50 percent , as expected by all 39 analysts polled by Reuters.
The Bank of Korea (BOK) has argued it needs to see more progress on prices to gain confidence that they are moving towards the bank’s 2 percent target before lowering borrowing costs.
While Rhee flagged it might be difficult to reduce rates this year, there was a crucial change in the central bank’s policy statement, suggesting a cut was still possible.
