S. Korea's central bank to keep eased financial policy

SEOUL, Feb. 15 (Yonhap) -- South Korea's central bank said Monday that it will
keep its accommodative financial policy stance in order to prop up growth
momentum in the private sector.

In a report submitted to a National Assembly committee on its operation plan for
this year, the Bank of Korea (BOK) said that it will run its key interest policy
in a manner dedicated to securing a sustained economic recovery, though it will
closely monitor overall financial and economic conditions.
"With uncertainties still running high on our growth path, we will keep our eased
financial policy stance so as to support strengthening of growth momentum in the
private sector," it said. "Going forward, the key interest rate will be managed
for the time being in a direction that helps sustain continuance of economic
recovery."
The comments come after the BOK kept its key interest rate unchanged at a record
low of 2 percent last week for a 12th consecutive month. It cut the rate by a
total of 3.25 percentage points between October 2008 and February 2009 in a bid
to bolster the slumping economy.
South Korea's economy has been rapidly rebounding from a downturn, helped by the
government-led stimulus measures coupled with the central bank's easing policy
over the past year.
The nascent recovery has led many experts to suggest the need to roll back some
easing measures in a so-called exit strategy, as they fear that a delay could
lead to negative impact such as the rise of asset bubbles.
The government has been saying that it will maintain its "expansionary"
macroeconomic policy for the time being, citing considerable downside risks at
home and abroad.
South Korea's economy, Asia's fourth-largest, grew 0.2 percent last year,
avoiding what many feared would be the first contraction in more than a decade.
This year, the government expects the economy to expand 5 percent.
In the report, however, the BOK cited high unemployment problems in major
advanced countries and fiscal issues in some European nations as downside risks
that could weigh on the overall improving economic conditions.
The bank also said it will keep its eased monetary policy for the time being but
adjust it at an "appropriate pace and extent" by reviewing the overall financial
and economic conditions at home and abroad.
kokobj@yna.co.kr
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