Central bank of South Korea freezes interest rate for ninth straight month

Friday, March 9, 2012

SEOUL -- South Korea's central bank Thursday froze its key interest rate for a ninth straight month, balancing inflationary pressure and an economic slowdown.

The Bank of Korea held the benchmark seven-day repo rate at 3.25 percent in March, as widely expected.

Analysts said the central bank was likely to shift focus more to curbing inflation from stoking growth in the coming months as rising oil prices could add to inflationary pressure.

Signs of an economic recovery at home and overseas remained weak, preventing policymakers from carrying out monetary tightening, they said.

South Korea's inflation eased to a 14-month low in February but analysts said last year's high prices masked a stubbornly high inflation rate.

The consumer price index increased 3.1 percent year-on-year in March and 0.4 percent month-on-month, Statistics Korea said.

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