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— South Korea's central bank left its key interest rate unchanged at a record low 2 percent Thursday for a seventh straight month as the country emerges from its worst slowdown in over a decade.
To help support the economy amid the global financial crisis, the Bank of Korea had slashed the benchmark seven-day repurchase rate six times since early October.
South Korea's export-driven economy, battered by declines in global consumer demand, has been grappling with its worst slowdown since the 1997-98 Asian financial crisis.
The economy has rebounded some, growing 2.6 percent in the second quarter compared to the first quarter amid signs government and central bank efforts to stimulate demand were working.
That was its fastest growth rate in 5 1/2 years and up sharply from a 0.1 percent expansion in the first quarter and a 5.1 percent contraction in the fourth quarter of 2008.
In a statement, the bank's policy committee said that domestic consumption and exports showed signs of recovery, although it maintained a cautious view.
"Uncertainties remain over (the economic) growth path," the statement said.
The committee said it will stick to its "accommodative policy stance for the time being" — indicating the key interest rate would stay low for now.
The committee's statement "disappointed some observers who expected the bank to be more explicit in signaling an end its loose monetary policy," Alaistair Chan, an economist at Moody's Economy.com in Sydney, wrote in a commentary on the decision.
Chan said asset prices are likely to be the reason for South Korea's central bank to begin raising interest rates, which he expects will happen early next year.
Housing prices in Seoul are back to pre-crisis levels, said Chan, adding the South Korean government has encouraged commercial banks to base lending decisions on borrowers' incomes, not on property values.
South Korea's benchmark Kospi index rose a 2.3 percent to finish at this year's high of 1,644.68.
