SEOUL, April 12 (Xinhua) -- South Korea's central bank on Thursday froze its benchmark interest rate at 1.5 percent on rising concerns about the U.S. protectionist moves.
Bank of Korea (BOK) Governor Lee Ju-yeol and six other policy board members decided to leave the seven-day repurchase rate unchanged at 1.5 percent.
The bank raised the rate by 25 basis points in November last year to the current level, marking the first rate increase in almost six and a half years.
The rate freeze was in line with market expectations. According to a Korea Financial Investment Association (KFIA) poll of 200 fixed-income experts, 89 percent of them predicted the rate on hold.
The BOK refrained from altering the policy rate on concerns that the U.S. protectionist moves could trigger a trade war and dealt a big blow to global trade.
Trade experts here saw little possibility for the trade friction between China and the United States becoming a trade war, but the U.S. protectionist moves would shrink trade globally and hit hard the South Korean economy which depends on exports for about half of its gross domestic product (GDP).
The country's headline inflation stayed below the BOK's inflation target of 2 percent for the past months, reducing pressure on the BOK to tighten its monetary policy stance.
Consumer prices rose 1.3 percent in March from a year earlier, after gaining 1 percent in January and 1.4 percent in February, respectively.