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BOK Keeps Key Rate Steady at 3.5% for Seventh Straight Time

Written: 2023-11-30 10:32:58Updated: 2023-11-30 11:37:33

BOK Keeps Key Rate Steady at 3.5% for Seventh Straight Time

Photo : YONHAP News

The central bank has kept the key interest rate steady at three-point-five percent for the seventh consecutive time.

The decision was made during the year's eighth and final rate-setting session by the Bank of Korea's(BOK) monetary policy board on Thursday, maintaining the largest-ever two-percentage-point gap with the U.S. Federal Reserve's rate.

Following eight post-pandemic hikes amounting to three percentage points through January of this year, the board has left the rate untouched at three-point-five percent since its February session.

The BOK is assessed to have taken into account the growing financial imbalance between lackluster growth and snowballing household debt.

While maintaining its growth outlook for the year at one-point-four percent, the central bank revised down the forecast for next year by a tenth of a percentage point to two-point-one percent.

Pressure for a rate hike has scaled back with the unlikelihood of the Fed announcing its own hike any time soon amid favorable inflationary indices and stabilizing global oil prices.

With the BOK also deterred from cutting the rate in the wake of rising household debt, the unprecedented gap with the Fed and the Israel-Hamas war, local experts believe that the bank will consider it in the second half of next year following the Fed's "pivot" policy.

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