South Korea stands pat on record-low interest rate

[SEOUL] South Korea's central bank on Thursday chose to leave its benchmark interest rate unchanged for April, following a surprise 25 basis point reduction the previous month.

With the base rate at a record-low 1.75 per cent, Thursday's decision by the Bank of Korea (BOK) to stand pat had been widely expected.

The March cut was the second in five months and reflected concerns that the economy is suffering from slow demand and lack of confidence among businesses and consumers.

Low rates are very much the trend across the Asia-Pacific region.

In recent months China and India have both made two reductions, while Australia, Indonesia, Singapore and Thailand have also been forced to ease monetary policy.

The BOK in January slashed its economic growth forecast for this year to 3.4 per cent from the previously tipped 3.9 per cent, while it also lowered its inflation outlook to 1.9 per cent from the 2.4 per cent earlier stated.

Slumping oil prices saw inflation fall to 0.5 per cent in February, the lowest rate for 15 years, deepening fears of deflation that could hammer an overgrown property market.

AFP