South Korea's central bank on Thursday left its key interest rate unchanged for the eighth straight month, amid a cooling property market and subdued inflationary pressure. After a monthly policy-setting meeting, the April target for the call rate remains unchanged at a five-year high of 4.5 percent.
The Bank of Korea has kept the rate, the interest charged on overnight interbank loans, unchanged since last September after three rises earlier last year. "The economy has been at the bottom of the growth cycle between the fourth quarter last year and the first quarter and will begin to show moderate improvements from now on," said governor Lee Seong-Tae.
"External factors such as the US housing market problem won't likely deteriorate to the point they hurt the economy," Yonhap news agency quoted him as saying. "We've decided to wait and see how growing lending by financial institutions will affect the rising liquidity, as deposit rates are also going up."
Bank lending to corporations reached a 38-month high in March, mainly because loans to smaller companies rocketed to a new high of 6.8 trillion won (7.28 billion dollars). "Consumer price inflation and core inflation both remain stable," the central bank said in a statement. "The upward pace of real estate prices has slowed down."
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