The Bank of Korea on Friday froze its benchmark interest rate for May at the record-low level of 1.75 percent for the second straight month.
In its monthly meeting to set the rate, the central bank’s Monetary Policy Committee was quoted as saying by Yonhap News that "the economy will show a modest trend of recovery going forward," but added that the volume of banks’ household loans had grown "at a level substantially exceeding that of recent years."
Reuters said 30 of 34 analysts it polled predicted no change, while 16 of 19 analysts surveyed by Bloomberg said they expected the freeze.
Bloomberg also said policymakers apparently weighed signs of improving domestic consumption against rising consumer debt and sluggish exports.
Over the past ten months, the central bank has made three rate cuts of a combined 0.75 percentage point, with the last cut coming in March.
The Wall Street Journal in a dispatch from Seoul said, “Korean policymakers are awaiting more economic data through the second quarter to better assess the state of the economy after a moderate recovery in the first quarter.”
By D. Peter Kim
