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| Bank of Korea Governor Lee Ju-yeol / Yonhap |
The Bank of Korea (BOK) on Friday decided to keep its policy rate frozen at a record low amid signs of improving economic conditions.
As was expected, the BOK's monetary policy board voted to keep the rate frozen at 1.25 percent in this year's first rate-setting meeting.
In a survey conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency, all 19 experts polled had anticipated a rate freeze in January.
The rate has been kept steady since October when the seven-member board slashed it by a quarter percentage point to match the all-time low of 1.25 percent.
The latest rate cut had followed the board's first rate reduction in three years in July.
Even with two rate cuts in just three months, the BOK has been and still is widely expected to again trim the base rate to support the local economy, whose outbound shipments have dropped for 13 consecutive months as of December.
BOK Gov. Lee Ju-yeol earlier said the central bank will continue to maintain its easing stance in 2020 but first check the effects of the two previous rate cuts last year.
The decision to keep the rate steady also follows recent signs of a recovery in demands and prices for semiconductors, the country's single largest export item.
Weak global prices of memory chips led to a sharp drop in the value of South Korea's outbound shipments in 2019, despite an increase in their volume.
The country's exports of chips plunged 25.9 percent on-year to US$93.9 billion in the year, while its overall exports dipped 10.3 percent to $542.4.
Signaling a possible recovery, the country's exports reached $13.3 billion in the first 10 days of the month, up 5.3 percent from the same period last year, according to earlier reports.
Samsung Electronics, the world's largest memory chip maker, has also reported better-than-expected fourth-quarter earnings last week, possibly indicating a recovery in global chip prices. (Yonhap)
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