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S Korea keeps interest rate unchanged

South Korea's central bank kept its key interest rate unchanged at 2.5 per cent for the ninth consecutive month Thursday on mixed prospects of economic recovery at home and abroad.

SEOUL: South Korea's central bank kept its key interest rate unchanged at 2.5 per cent for the ninth consecutive month Thursday on mixed prospects of economic recovery at home and abroad.

The decision came at a time of growing concern of global financial volatility as the US Federal Reserve winds down its stimulus programme, which has been credited with an investment boom in emerging markets last year.

"The global economy is expected to continue moderate recovery, but there are lingering concerns that the US Fed's easing of monetary policy may affect global financial markets and weaken recovery in some emerging markets," the Bank of Korea said in a statement.

Its last rate change was a surprise 0.25 percentage point cut in May to support growth in Asia's fourth-largest economy, which expanded 2.8 per cent in 2013, up from 2.0 per cent in 2012 and in line with government forecasts.

The bank has tipped 3.8 per cent growth in 2014, buoyed by government stimulus spending and improving overseas markets.

Inflation has remained well below the bank's target of 2.5-3.5 per cent for 15 straight months.

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