SEOUL, South Korea (AP) -- South Korea's central bank kept its key interest rate on hold Thursday after raising it last month amid inflation worries.
The Bank of Korea announced that it decided to leave the benchmark seven-day repurchase rate at 2.5 percent during a monthly monetary policy meeting.
The increase in November from 2.25 percent was the second in four months and was spurred by rising prices.
South Korea's inflation rate hit 4.1 percent in October. That year-on-year increase in consumer prices was slightly outside the central bank's comfort zone. The bank's inflation target is 3 percent, though that includes what it calls a "tolerance range" of plus or minus 1 percentage point.
Inflation, however, eased in November to an increase of 3.3 percent from the same month the year before.
The Bank of Korea had aggressively cut its interest rate a total of 3.25 percentage points to a record low 2 percent between October 2008 and February 2009 as it worked with other central banks to fight the global financial crisis and subsequent economic downturn.
The bank's monetary policy committee raised the borrowing cost to 2.25 percent in July amid solid growth prospects for the domestic economy and inflation concerns.
Thursday's decision was widely expected. All economists at 16 financial institutions surveyed by Yonhap Infomax, the financial news arm of Yonhap news agency, predicted the bank would leave the rate unchanged.
|