Bank of Korea Keeps Base Rate Steady at 2.5%

The Bank of Korea's Monetary Policy Board on Friday decided to keep the base rate steady at 2.50% for the intermeeting period, taking into account the uncertainty surrounding the recent developments in the Middle East, which could fan inflation.The central bank's decision was largely expected by all 31 economists polled by Reuters. Most of the 30 economists expect no rate change through this year, with only four forecasting an increase--three to 2.75% and one to 3% by year-end.The Bank of Korea expects inflation to climb to the mid-upper 2% range amid higher global oil prices, though government measures may partly offset the pressure.Annual inflation is now projected to surpass the February forecasts of 2.2% for headline inflation and 2.1% for core inflation. However, uncertainty remains high due to oil prices, exchange rates, policy effects, and cost pass-through levels.

-- The Bank of Korea's Monetary Policy Board on Friday decided to keep the base rate steady at 2.50% for the intermeeting period, taking into account the uncertainty surrounding the recent developments in the Middle East, which could fan inflation.

The central bank's decision was largely expected by all 31 economists polled by Reuters. Most of the 30 economists expect no rate change through this year, with only four forecasting an increase--three to 2.75% and one to 3% by year-end.

The Bank of Korea expects inflation to climb to the mid-upper 2% range amid higher global oil prices, though government measures may partly offset the pressure.

Annual inflation is now projected to surpass the February forecasts of 2.2% for headline inflation and 2.1% for core inflation. However, uncertainty remains high due to oil prices, exchange rates, policy effects, and cost pass-through levels.