18.10.201801:02:00UTC+00South Korea Keeps Rates On Hold

South Korea's central bank decided to maintain its interest rate citing worsening outlook for the economy.

The Monetary Policy Board of the Bank of Korea, on Thursday, decided to leave the Base Rate unchanged at 1.50 percent.

The bank noted that although the domestic economy sustained a rate of growth at its potential level generally, domestic economic growth is set to be somewhat below the path projected in July going forward.

According to economic outlook, the Korean economy will grow 2.7 percent both in 2018 and 2019. It is expected to continue its steady pace of growth this year, although investment will slow, as exports and consumption show buoyancy.

The policy rate is likely to be left on hold not just until the end of this year, but next year as well, Gareth Leather, an economist at Capital Economics, said.

The economist observed that weaker global demand and worsening labor market conditions mean Korean growth is likely to slow over the coming quarters. Escalating US-China trade tensions are a further downside risk to the economy.