South Korea holds rate, monitoring Greece, capital flows
South Korea’s central bank maintained its base rate at 1.50 percent, as expected, saying it “will closely monitor the trend of increase in household debt and external risk factors such as the situation in Greece and shifts in major countries’ monetary policies, as well as the trends of capital flows.”
The Bank of Korea (BOK), which has cut its rate by 50 basis points this year following cuts in March and June, maintained its view that the global economy will “sustain its modest recovery,” but added that this could be affected by heightened volatility in financial markets due to the situation in Greece, changes in monetary policies by major countries and by weaker growth in emerging markets, such as China where it said the trend of slowing growth had continued.
The BOK also took note of a decline in Korean stock prices due to the situation in Greece and a depreciation of the won against both the U.S. dollar and Japanese yen while long-term market rates had risen in response to expectations of an increase in rates by the U.S. Federal Reserve and higher Korean bond issuance.
Consumption in South Korea has “declined significantly” and sentiment of economic agents has worsened due to the outbreak of the Middle East Respiratory Syndrome (MERS), but the BOK said it still sees the domestic economy will show an improving trend due to expansionary macroeconomic policies and a gradual decline of the shock from the MERS outbreak.
Last month Moody’s Investors Service said MERS amounted to a credit negative for Korea as it had weakened consumer sentiment and threatened to undermine the incipient economic recovery. But the Korean government has announced a 11.8 trillion won extra budget to counter some of the dampening effects of the virus, a move that economists said would make a BOK rate cut less likely.
Korea’s Gross Domestic Product expanded by an annual 2.5 percent in the first quarter of this year, down from 2.7 percent in the fourth quarter and the weakest rate since the first quarter of 2013.
The inflation rate rose to 0.7 percent in June from 0.5 percent due to higher agricultural, livestock and fish prices but the BOK said it expects inflation to continue at a low level due to low oil prices.
The Bank of Korea issued the following statement:
Source: http://www.centralbanknews.info/2015/07/south-korea-holds-rate-monitoring.html
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).