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South Korea leaves key interest rate unchanged PDF Print E-mail
Saturday, 12 January 2008

Agence France-Presse . Seoul

South Korea's central bank on Thursday left its key interest rate unchanged for the fifth straight month as concerns over mounting external uncertainty offset rising inflation woes.

The Bank of Korea kept the inter-bank overnight call rate target at five per cent in January.

'There remains a high degree of uncertainty surrounding future economic developments, largely due to the run-up in oil prices and the possibility of international financial instability,' the bank said in a statement.

External risks such as rising oil prices and the US subprime mortgage crisis threaten to dampen economic growth with inflation at its highest level here in three years.

'I'm concerned about inflation,' the bank's governor Lee Sung-Tae told journalists, adding that inflation is expected to remain high throughout the first half of 2008.

Consumer prices rose 3.6 per cent year-on-year in December, up from 3.5 per cent the previous month. Despite growing pressure to rein in inflation, the central bank has little room to maneuver, Lee said.

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