By Kwanwoo Jun
South Korea's central bank unexpectedly stood pat amid lingering pressure to cut its policy rate further to support growth in Asia's fourth-largest economy.
The Bank of Korea kept its benchmark seven-day repurchase rate unchanged at 3.00% on Thursday, following a back-to-back rate cut in November.
The surprise decision came as the trade-dependent economy strives to tackle challenges from weakening export growth and a sluggish recovery in domestic demand that has been partly hindered by political turmoil over impeached President Yoon Suk Yeol's short-lived declaration of martial law in December.
Nineteen out of 26 economists surveyed by The Wall Street Journal had forecast a quarter-percentage-point cut. The remaining seven had expected the BOK to pause due to caution around the won's weakness as well as uncertainty over the future pace of rate cuts by the U.S. Federal Reserve and President-elect Donald Trump's trade policy.
Since it started its easing cycle in October with the first rate cut in more than four years, the BOK has signaled that it will step up support for the sagging, export-driven economy.
Analysts expect the BOK to deliver more rate cuts down the road to bring the base rate to as low as 2.00% for the current easing cycle to support growth.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
01-15-25 2009ET
