Interest rate will steady for longest time ever

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Interest rate will steady for longest time ever

The Bank of Korea is likely to keep the key interest rate unchanged this year, setting a record for the longest stretch that the benchmark has stayed on hold, an adviser to the government said.

“Inflation pressures will bar a rate cut while the slower economic growth path will prevent them from raising,’ said Yun Chang-hyun, who as president of the Korea Institute of Finance advises the central bank, finance ministry and financial regulators. He spoke in a May 11 interview in Seoul.

Korea held off from altering borrowing costs for an 11th month last week. The longest pause since the central bank began setting a rate in 1999 was the 17-month stretch between February 2009 and July 2010, when the benchmark was at a record low of 2 percent to counter the effects of the global financial crisis.

The economy will grow 3.4 percent this year, Yun said, below his institute’s October forecast of 3.7 percent.Bloomberg

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