May 11, 2009

S. Korean interest rate unchanged

South Korea's central bank, saying the pace of economic downturn had eased, Tuesday left its key interest rate unchanged at 2 percent.

It was the third straight month the Bank of Korea had made no change in the seven-day repo rate, a move that had been expected by experts, Yonhap news agency reported.

Prior to that, the bank, pressed to respond to the slumping economy, had cut the rate six times totaling 3.25 percentage points to bring it to current record low level of 2 percent.

In recent months, the pace of the downturn in domestic economic activity has clearly eased, the bank said in a statement, adding in the coming months the Korean economy, the fourth largest in Asia, was expected to show a mildly positive growth.

But the bank also warned there remained a lingering high degree of uncertainty given the existence of both upside and downside risks.

Among the positive signs, in the first quarter of this year the country's economy grew 0.1 percent from the prior quarter, Yonhap said. Also, in March, the industrial output grew 4.8 percent from the previous month.