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central bank-low rates

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(Globalpost/GlobalPost)

SEOUL, March 22 (Yonhap) -- South Korea's top central banker said Friday that there are some concerns in the global financial markets that a long streak of low rates could spark unintended problems.

"Some heads of global investment banks express concerns over when the global economy will recover. But others said that a long streak of low rates could bring about problems that we never expected," Bank of Korea (BOK) Gov. Kim Choong-soo told heads of local banks.

His remarks came as analysts are divided over whether the BOK will cut the key interest rate at April's rate-setting meeting.

More experts are betting on a rate cut, saying that a rate reduction may come as early as April, by which the government will unveil its economic stimulus packages. The government is seeking to draw up an extra budget worth about 10 trillion won (US$8.95 billion) to prop up the economic growth.

The central bank froze the benchmark seven-day repo rate at 2.75 percent for the fifth straight month in March.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130321/central-bank-low-rates