BOK keeps rate steady for January at 1.25%
The Bank of Korea has lowered its growth forecast to two-and-a-half percent this year,… down zero.three percentage points from its original projection in October.
It cited worsening economic sentiment,… after consumer sentiment hit a near eight-year low late last year, with local political turmoil widely expected to put a damper on private economic activity.
The BOK also trimmed its inflation outlook for the year to 1.8 percent,… from the previous 1.9 percent.
"With rising global oil prices,… the inflation rate is likely to increase in the latter part of the year,… but we see no signs of demand propping up the inflation rate."
In other words,… external factors could work to boost Korea's inflation figure,… as consumer sentiment won't be strong enough to boost the economy.
On top of that, the BOK left its key rate steady at a record low of one-and-a-quarter percent,… continuing its monetary easing policy for a seventh straight month.
The central bank says that while export figures are likely to improve, on the back of a strengthening global economic recovery,… worsening domestic consumer sentiment has kept the BOK from adjusting the rate.
And while the bank said it would closely monitor any uncertainties both at home and abroad,… including the fallout from the prospective economic policies of the incoming U.S. administration and the Fed's faster-than-expected rate hike plan.