Seoul, April 11 (QNA) - South Korea's central bank held its key interest rate steady for the second straight time Tuesday as inflation appears to be easing and concerns are rising over an economic slowdown.
In a widely expected decision, the seven-member monetary policy board of the Bank of Korea (BOK) kept the benchmark seven-day repo rate unchanged at 3.5 percent. The decision was made unanimously, the BOK said.
This marked the second straight time that the BOK has stood pat on monetary policy following a rate freeze in February. The pause came after the BOK had delivered seven consecutive hikes in borrowing costs since April last year, according to (Yonhap) news agency.
The back-to-back rate freezes are raising expectations that the BOK might be ending its long-held hawkish monetary policy stance amid signs of moderating inflation, rising economic slowdown woes and lingering fears over global banking turmoil.
South Korea's consumer prices, the main gauge of inflation, rose 4.2 percent in March from a year earlier, which was the slowest on-year price rise in a year. It has been on the decline since peaking at a 24-year high of 6.3 percent in July last year.
It is still much higher than the central bank's midterm inflation target of 2 percent.
Though inflation appears to be moderating, the country's economy is showing signs of slowing down too, with exports, the country's major growth engine, sharply shrinking in the face of less demand in major markets.
South Korea posted a current account deficit for the second straight month in February, which was the first of its kind in about 11 years.
In February, the BOK lowered its economic growth outlook for South Korea this year to 1.6 percent from a 1.7 percent rise predicted three months earlier. (QNA)