BOK to keep call rate at present 5.25 percent

BOK to keep call rate at present 5.25 percent

The Bank of Korea held a meeting of the Financial and Monetary Committee Thursday and decided to keep the call rate at the present 5.25 percent per year.

Chon Chol-Hwan, governor of the Bank of Korea, said in a meeting with reporters that his bank decided not to raise the call rate because of lingering market unrest due to uncertainties stemming from the effects of the exit of insolvent companies and the ongoing second round of financial restructuring.

The governor said that the decision was also affected by consumer prices, which had continued to rise sharply since June but declined slightly in October due to falling prices for agricultural products.

In connection with restructuring in the corporate and financial sectors, Governor Chun said that the reforms may cause market unrest in the short term but in the long term, they would boost expectations for the Korean economy. The only problem is if the restructuring can proceed as scheduled, he said.