South Korea freezes key interest rate for 9th month
Posted: 12 November 2009 1038 hrs

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SEOUL: South Korea's central bank on Thursday froze its key interest rate at a record low of 2 per cent for a ninth month, saying uncertainties remain about the pace of growth.

At its monthly policy meeting, the Bank of Korea left the benchmark seven-day repo rate unchanged.

It had cut the rate by a total of 3.25 percentage points between October 2008 and February in a bid to slow down a sharp economic downturn.

The bank in a statement said economic growth is likely to continue, but the spread of H1N1 flu is a concern. It said headline inflation is tipped to remain stable for some time.

The bank took a cautious stance despite a recent series of positive numbers suggesting the economy is recovering well from the global downturn.

The October jobless rate fell to the lowest level for 11 months and industrial output in September posted its highest growth for 20 months.

Gross domestic product rose 2.9 per cent in July-September compared to April-June, the fastest quarter-on-quarter growth for more than seven years.

The government, however, has said it will not withdraw stimulus measures in the near future, citing the still weak job market and sluggish capital investment by companies.


- AFP/so