2019.05.3100:22:00UTC+00Bank Of Korea Leaves Rate Unchanged

Bank of Korea kept its benchmark interest rate unchanged on Friday, as uncertainties concerning economic growth outlook heightened, mainly due to the escalation of the US-China trade dispute.

The Monetary Policy Board of the Bank of Korea decided today to leave the Base Rate unchanged at 1.75 percent.

Although the domestic economy recovered slightly from its slowdown in the first quarter driven by consumption, facilities and construction investment continued undergoing adjustments amid sluggish exports.

The bank expects consumption to continue to grow and exports and facilities investment to recover gradually in the second half of this year. Nonetheless, the adjustment in construction investment will continue.

However, uncertainties concerning the forecast path have risen, chiefly due to the escalation of the US-China trade dispute, the bank said.

On price front, the board said consumer price inflation will fluctuate for some time below 1 percent and then run at the low- to mid-1 percent level from the second half of this year, but downside risks to the projected path have increased somewhat.

The board said it will carefully monitor developments such as the US-China trade dispute, any changes in the economies and monetary policies of major countries.

Alex Holmes, an economist at Capital Economics, said with the Bank likely to be looking back at a second quarter of disappointing growth at its next meeting in July, the first cut will come then.