The borrowing cost of Bank of Korea is held unchanged for its continuous sixth month, ensuring resistance and pressure from the government in regard to the reduction, even after there is slide in the value of yen that can hurt the export market of the nation along with threats from North Korea for war.
It is revealed that Governor Kim Choong Soo along with his associate board has been able to keep the benchmark for purchase rate of seven days stable at the 2.75 percent. This information is revealed by the central bank today in a statement published at Seoul. It is also observed that nine out of twenty economists who are surveyed by Bloomberg has speculated and estimated this move while the others are in favor of estimation that there will be a cut point of around 25 basis points as the bank is planning program for expansion of cheap loans in small business sectors.
Governor Kim has stated that the finance position of the central bank is already in its accommodative and harmonic style in this fiscal policy, with pressures being rejected from the government in order to ease out the planned stimulus package. It is revealed that today the Bank of Korea has pared with its growth estimation of this year, rising to 2.6 percent in the month of January whereas the estimation was at 2.8 percent. Kim also adds that the fourth largest economy of the world is gradually showing signs of enhancement and improvement.
According to Ronald Man who is an economist of HSBC that is based at Hong Kong, “Importance of economics prevails more than politics. Eagerness for the supplementary budget is high as it is likely to be announced in the coming week. The data compiled by Bloomberg shows that the one year interest rate swapping at South Korea has jumped by average of 6 basis points, making for 2.65 percent from its previous 0.06 percent. This hike is considered as the largest gain witnessed since the month of August of 2012. In regions of Seoul, 0.6 percent is won which counts for 1,129.60 against dollar value. Even the Kospi stock index market got a rise of 0.1 percent.
Last week, Cho Won Dong, who is the prime advisor of President Geun Hye said in a statement that it would had been better if the central bank of Korea reduced on their interest rates. It was on the 28th March that the Finance Ministry lowered the economic growth estimation for this year to around 2.3 percent instead of the 3 percent speculation from the month of December. It is witnessed that the value of won rose about 25 percent against yen in the last 6 months.