BOK stands pat first after delivering seven straight rate hikes amid growth woes

Seoul, Feb. 23 (BNA): South Korea’s central bank on Thursday kept its benchmark interest rate unchanged for the first time after delivering seven consecutive increases as concerns about an economic recession mounted.

The Bank of Korea (BOK) Monetary Policy Board held a meeting and decided to keep the benchmark seven-day repo rate steady at 3.5%.

It was the first time the Bank of Korea has stood well after seven consecutive increases delivered since April last year as it battled inflation, according to South Korean news agency Yonhap.

Thursday’s freeze came amid growing concerns that the aggressive monetary tightening imposed over the past year and a half could overcool growth.

The Bank of Korea began the cycle of raising interest rates in August 2021 after keeping borrowing costs at record low levels to boost the economy hit by the pandemic. Since then, it has raised the benchmark interest rate by 3 percentage points.

The Bank of Korea recently said that it is necessary to take time to assess the implications of these price increases for the economy and to take into account various factors, including growth and financial market conditions, in determining future monetary policy directions.

HF