Bank of Korea freezes key rate at 1.75 percent for April

• Published Apr 18, 2019 10:04 AM KST
• Updated Apr 18, 2019 10:06 AM KST

South Korea's central bank held its policy rate unchanged at 1.75 percent for April on Thursday amid persistent concerns over an economic slowdown, despite a decline in inflationary pressure.

The monetary policy board of the Bank of Korea (BOK) voted to leave the bellwether call rate steady for the fifth straight month after raising it by a quarter percentage point in November last year.

The BOK's wait-and-see stance had been widely expected as South Korea's economy shows some signs of a downturn in exports and employment amid protracted U.S.-China trade tensions.

South Korea's export-reliant economy is struggling with a drawn-out trade dispute between the United States and China, and weaker private consumption at home.

Exports fell for the fourth straight month in March. Outbound shipments came to US$47.1 billion for March, down from the $51.3 billion a year earlier, according to government data.

Analysts had largely expected the BOK to leave the rate steady at this month's policy meeting, even though inflation appeared to be kept in check.

South Korea's consumer prices rose at the slowest pace in nearly 20 years last month.

The consumer price index rose 0.4 percent in March from a year earlier, marking the third straight month that the consumer price index has been below 1 percent, according to the data compiled by Statistics Korea.

The March figure marks the lowest increase since July 1999, when the country's consumer prices rose 0.3 percent, the statistical office said.

Last month, the International Monetary Fund (IMF) said South Korea is facing short- and medium-term headwinds to growth, which requires policy action.

"The Bank of Korea should have a clearly accommodative monetary policy stance, and the authorities should maintain appropriately tight macroprudential policies to preserve financial sector resilience," the IMF said. (Yonhap)