South Korea’s central bank on Thursday kept its benchmark interest rate unchanged for the first time after delivering seven straight increases as concerns are growing over an economic slump.
The monetary policy board of the Bank of Korea (BOK) held a meeting and decided to hold the benchmark seven-day repo rate steady at 3.5 percent.
This marked the first time that the BOK has stood pat following seven straight increases delivered since April last year as it has grappled with inflation, according to South Korean News Agency (Yonhap).
Thursday’s freeze came amid rising worries that aggressive monetary tightening that has been enforced over the past 1 and a half years could excessively cool down growth.
The BOK began its rate-lifting cycle in August 2021 after keeping borrowing costs at record lows to bolster the pandemic-hit economy. It has since raised the benchmark rate by a combined 3 percentage points.
The BOK has recently said that it is necessary to take time to appraise the ramifications of those rate increases on the economy and take into consideration various factors, including growth and financial market situations, in setting its future monetary policy directions.
Source: Bahrain News Agency