South Korea Holds Benchmark Interest Rate at 2%

Seeking to strengthen the nation’s economic recovery, South Korea's Central Bank
has maintained its benchmark interest rate at 2% for a 10th month, reports Bloomberg.


According to Bloomberg, South Korea's economy grew 3.2% in the third quarter, the fastest pace in more than seven years, as companies including Samsung Electronics Co. and LG Electronics Inc. reported a jump in profits.


Quoting analysts, Bloomberg says that policy makers have expressed concern about accelerating borrowing but they face political pressure to keep rates low to ensure the recovery isn’t repressed before next year’s regional elections.


“The macroeconomic data has improved and that should suggest a rate hike is possible any time,” Kwon Young Sun, an economist at Nomura International Ltd. in Hong Kong, told Bloomberg. “However, there are non-economic factors such as the government’s policy preference of growth over inflation that’s holding the central bank back from raising rates.”

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