South Korea freezes policy rates

Seoul, Aug 8 (IANS) South Korea's central bank Thursday kept its policy rate on hold at 2.5 percent on the back of solid economic recovery caused by fiscal and monetary stimulus measures.

Bank of Korea Governor Kim Choong-soo and monetary policy board members decided to freeze the benchmark seven-day repurchase rate at 2.5 percent after lowering the rate three months earlier. The seven-member committee cut borrowing costs by 25 basis points in July and October last year, reported Xinhua.

"The country's GDP growth rose to the one percent level for the first time in nine quarters after hitting the bottom in the third quarter of last year. If this trend continues, the economy will recover in accordance with the bank's expectations," said Lee Jung-joon, a fixed-income analyst at HMC Investment & Securities in Seoul.

South Korea's GDP expanded 1.1 percent in the second quarter from three months earlier after gaining 0.8 percent in the prior quarter. The reading was the highest since 1.3 percent tallied in the first quarter of 2011, beating market consensus of 0.8 percent.


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