March 11, 2016 12:10
The Bank of Korea on Thursday kept the key interest rate unchanged at a record-low 1.5 percent for the ninth month running.
BOK Governor Lee Ju-yeol said lowering interest rates has a "limited impact" on the real economy when external conditions are uncertain.
Critics say the BOK needs to cut interest further amid declining exports and shrinking consumption. But Lee said lowering rates alone is not a cure-all.
"Foreign investment in Korean stocks declined sharply until mid-February, and though it recently rose again external uncertainties remain, so we cannot rule out a change in the trend," he said. In other words, lowering rates could send foreign investors scuttling due to fears that the won will weaken.
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