S. Korea freezes benchmark interest rate at 1.5 pct

Source: Xinhua | 2018-02-28

South Korea's central bank on Tuesday froze its benchmark interest rate at 1.5 percent, keeping the rate in the level for three months.

Bank of Korea (BOK) Governor Lee Ju-yeol and six other policy board members decided unanimously to keep the seven-day repurchase rate on hold.

The rate was raised by a quarter percentage point to the current level in November last year, the first rate increase in almost six and a half years.

The rate freeze in February came amid rising expectations for the U.S. Federal Reserve to hike the current 1.25-1.50 percent range by 25 basis points in March.

If the Fed raises the rate as expected, the U.S. benchmark rate will be higher than the South Korean counterpart. It could cause an abrupt exodus of foreign capital from the South Korean financial market.