Bank of Korea Maintains Key Interest Rate Amid Economic and Inflation Challenges

SEOUL - The Bank of Korea (BOK) decided on Thursday to keep its key interest rate steady at 3.5 percent, marking the eighth consecutive session of maintaining the rate. This decision reflects concerns over a weak economic recovery and slower-than-anticipated moderation of inflation.

According to Yonhap News Agency, this rate freeze follows seven consecutive rate hikes between April 2022 and January 2023. The decision is seen as a response to mixed economic signals, including a recovery in exports but sluggish consumer spending and easing inflationary pressure. Despite the expectation of economic growth rebounding to over 2 percent this year, South Korea faces challenges like a property market slump and weak domestic demand. Inflation concerns persist, with consumer prices rising 3.6 percent on-year in 2023, higher than the central bank's target. The BOK's decision aligns with the Federal Reserve's recent actions to keep its benchmark lending rate steady.

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