South Korea freezes rate

Business

South Korea freezes rate

Close

South Korea's central bank Thursday kept its key interest rate unchanged.

08 December,2011 10:34 am

The bank kept its key interest rate unchanged at 3.25 percent for a sixth straight month, as it faced a dilemma over lingering inflation and a global economic slowdown.Analysts said the freeze underscored a policy dilemma as growth momentum was weakening while inflation persists. The inflation rate crept up above the central Bank of Koreas target band of 2%-4% again to 4.2% in November.Growth in Asias fourth-largest economy slowed for a second consecutive quarter in the July-September period to 0.8 percent on a quarter-on-quarter basis. From a year earlier, the economy grew 3.5%.A rate cut is likely to come in the first half of next year when inflation expectations may stabilise, Kim Dong-Hwan, a fixed-income analyst at Hi Investment & Securities, told Yonhap news agency.