SEOUL: South Korea's central bank kept interest rates steady at 2.50 percent for a 10th straight month on Thursday, and a firming economic recovery supported the consensus market view that the bank would begin raising interest rates later this year.
Following are key remarks from Bank of Korea Governor Kim Choong-soo at a news conference, translated by Reuters:
RATE DECISION: "The decision to keep rates steady was unanimous."
GLOBAL ECONOMY: "The global economy is seen sustaining a gradual recovery, but the US Federal Reserve's tapering and the growth slowdown in some emerging economies may have a downside effect." "Advanced economies will keep showing improvement (this year) while emerging market economies will rebound, but not to a large extent as some of these economies are going through political issues at home."
DOMESTIC ECONOMY: "The output gap will stay in the negative margin for the time being, but the extent is seen gradually reducing."
"It's still viable to say that the domestic economy will pick up in the second half of the year."
"Facilities investment rose (about) 5 percent in the third and fourth quarters (last year).
I cannot say recent weaknesses in industrial output warrant a slowdown in the economy." "Household savings have grown in South Korea recently and this will help households (pay back debt) compared to previous years."
INFLATION: "Inflation to stay low for the time being, but to pick up gradually."
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