key rate-March minutes

SEOUL, April 2 (Yonhap) -- Policymakers at South Korea's central bank froze the key interest rate in a 6-1 vote for March while one member argued for a rate cut, citing economic uncertainty and easing moves by other central banks, the bank's minutes showed Tuesday.

At a rate-setting meeting held on March 14, the Bank of Korea (BOK)'s seven-member monetary policy committee decided to leave the benchmark 7-day repo rate unchanged at 2.75 percent for the fifth straight month. The bank cut the key rate in July and October last year.

The split decision indicated that the board members had different assessments of economic conditions and impacts of the won's ascent to the yen.

The minutes showed that Ha Sung-keun, a BOK policymaker, expressed his outright opposition to the rate freeze, saying that uncertainty over U.S. spending cuts and tension over the yen's weakness warranted a rate cut. Ha is the only board member who argued for a rate cut for the third straight month.

The BOK's board members are poised to face a critical vote on April 11 as the central bank is under growing pressure to cut the rate to lend support for the government's stimulus.

On March 28, the government sharply cut its 2013 growth outlook to 2.3 percent from 3 percent, citing tough economic conditions at home and abroad. The government vowed to pursue an extra budget, which may reach more than 12 trillion won (US$10.7 billion), in a bid to bolster the slowing economy.

The BOK's 2013 growth forecast stood at 2.8 percent and is scheduled to unveil its revised growth outlook on April 11.

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