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S. Korea freezes policy rate at 2.5 pct

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(Globalpost/GlobalPost)

S. Korea freezes policy rate at 2.5 pct

SEOUL, Dec. 12 (Xinhua) -- South Korea's central bank froze its policy rate at 2.5 percent on Thursday, keeping its wait-and-see stance for seven straight months.

Bank of Korea Governor Kim Choong-soo and other policy board members decided to keep the benchmark seven-day repurchase rate at 2.5 percent in December, refraining from altering the rate since May when it cut the borrowing costs by 25 basis points.

The central bank was widely expected to freeze the rate ahead of the December Federal Open Market Committee meeting scheduled for two days from next Tuesday.

Concerns emerged over the U.S. Federal Reserve's tapering of its asset purchases following the upbeat U.S. jobs data. The U.S. jobless rate fell to a five-year low of 7 percent last month.

St Louis Fed President James Bullard said on Monday that probability of a reduction in asset purchases increased based on labor market data, while Richmond Fed President Jeffrey Lacker expected discussion about possibility of reducing the bond purchases at the December policy meeting.

Expectations for the timing of the Fed tapering were split, with some forecasting the scale-back in December and others predicting the March 2014 tapering.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/131212/s-korea-freezes-policy-rate-at-25-pct