South Korea, NZ freeze key interest rate

The Bank of Korea left the benchmark seven-day repo rate unchanged after the final rate-setting meeting under Governor Lee Seong-Tae, whose four-year term ends this month.

The bank, which is independent of politicians, had nevertheless come under pressure to keep the rate unchanged.

“Our economy will likely maintain growth amid steadily-increasing exports and recovering demand at home, but uncertainty exists over the growth path due to the financial problems of heavily indebted euro-zone countries,” the bank said in a statement.

Governor Lee said the central bank would maintain its accommodative policy aimed at helping boost the economy for the time being.

Meanwhile, New Zealand's central bank left its key interest rate unchanged at a record low 2.5 percent Thursday -- the seventh successive review to hold the rate steady as the economy stages a sluggish recovery from an 18-month recession.

The Reserve Bank, which slashed the official cash rate to 2.5 percent from 8.25 percent between July 2008 and April 2009, repeated Thursday that it will likely begin hiking interest rates and removing stimulus from midyear.

The decision to hold the rate was widely anticipated by markets.

“The New Zealand economy is recovering broadly as expected and growth is predicted to pick up further through 2010,” bank governor Alan Bollard said in a statement.

The central bank expects growth in New Zealand to increase to about 4 percent next year but cautions that this is a relatively subdued rebound from a recession.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos Respond to this email