Bank of Korea keeps rates, slashes economic forecasts

Seoul

SOUTH Korea's central bank held monetary policy steady and sharply cut this year's economic growth and inflation forecasts, but its firm conviction in a sustained recovery torpedoed the prospects of an imminent cut in interest rates.

Bank of Korea (BOK) governor Lee Ju-yeol spent much of a one-hour news conference after the decision promoting a view that currently low inflation is largely due to plunging oil prices. It did not imply imminent deflation, and did not demand cutting already record-low rates.