S Korea keeps interest rate unchanged

Signs of a global recovery have prompted South Korea's central bank to keep its interest rates on hold for the 10th month in a row.

South Korea's central bank has kept its key interest rate unchanged at 2.5 per cent for the 10th consecutive month, citing mixed signs of a global recovery.

Seven policymakers at the central Bank of Korea made the largely-anticipated decision on Thursday to freeze the overnight inter-bank loan rate.

"The US economy continues to rebound and the slowdown in the eurozone showed signs of abating, while growth in emerging markets slowed," the BOK said in a statement.

The impact of a move by the US Federal Reserve to taper its monetary easing policy still remains a potential threat, it added.

The central bank of Asia's fourth-largest economy has left the key rate unchanged since an unexpected 0.25-per cent cut in May last year.

The South's export-reliant economy was hit hard by slowing demand from 2008, but has picked up in recent years, with gross domestic product expanding 2.8 per cent in 2013 from 2.0 per cent in 2012.

The bank has tipped 3.8 per cent growth in 2014, bolstered by government stimulus spending and improving overseas markets.

Inflation has remained well below the bank's target range of 2.5 to 3.5 per cent for more than a year.

Source: AAP

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