Interest Rates Frozen for 10th Straight Month

The Bank of Koreas kept the base interest rate unchanged at 1.5 percent for the 10th month in a row on Tuesday. The central bank also slashed the economic growth outlook for this year from three to 2.8 percent.

Talking to reporters after the monthly monetary policy committee meeting, BOK Governor Lee Ju-yeol said uncertainties about the timing of U.S. interest rate hikes, China's recovery and global oil prices put a dampener on Korea's prospects.

"We need to secure room to maneuver in monetary policy in preparation for external shocks," Lee said.

He added that Korea's first-quarter growth, which will be announced on Tuesday, did not meet projections set in January, while low global oil prices have led to slower global growth and outlooks.

Lee added that Korea's exports keep declining, although private consumption and business sentiment have improved slightly.

He forecast gradual improvements in domestic economic conditions led by a recovery in private consumption. The BOK expects private consumption to rise 2.3 percent.