The Bank of Korea maintained its 7-day repurchase rate unchanged at 3.25%. The Bank said: "Although construction investment has been sluggish, consumption and facilities investment have increased and exports have shown a steady expansion. On the employment front, the uptrend in the number of persons employed is being sustained, led by the private sector. The Committee anticipates that the domestic economic growth rate will gradually return to its long-term trend level going forward, although viewing downside risks as likely to remain high for some time due mostly to the impact of external risk factors."
At its January meeting the Bank of Korea also held the interest rate unchanged at 3.25%, after increasing the 7-day repurchase rate by 25 basis points to 3.25% at its June meeting. South Korea reported a steady consumer price inflation of 3.1% in February, compared to 3.4% in January, 4.2% in November, 3.9% in October, 4.3% in September, 5.3% in August, 4.7% in July 4.4% in June, 4.1% in May, and 4.2% in April.
The inflation rate is currently just within the Bank's inflation target of 2%-4% through 2012. The South Korean economy grew 0.4% in Q4 (0.8% in Q3, 0.9% in Q2), placing annual GDP growth at 3.4% (3.5% in Q3, 3.4% in Q2). The South Korean Won (KRW) has gained about 1% over the past year against the US dollar, while the USDKRW exchange rate last traded around 1,117.
I am curious about North Korea's new leadership, will they be as belligerent and backwards as the previous leaders? Or - and this scenario is more interesting - will North Korea start opening up and following the path of China? that would be cool...
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