September 9, 2004
The Bank of Korea
Monetary Policy Decision
The Monetary Policy Committee of the Bank of Korea decided today to maintain the benchmark call rate (uncollateralized overnight rate) at its current level (3.5%) for the intermeeting period.
(An unofficial English translation based on the Korean original of the decision on monetary policy taken by the Monetary Policy Committee on September 9, 2004 is attached.)
In the real economy, private consumption and facilities investment remain sluggish. Exports have exhibited some degree of slowdown in the pace of their expansion.
Consumer price and core inflation have risen more rapidly than in the previous month. Along with this, upward pressures on prices may increase as high oil prices are anticipated to persist and an adjustment of charges for some public services is scheduled before the end of this year.
Meanwhile, the current account is forecast to maintain a surplus, mainly thanks to the surplus on the goods account.
In the financial markets, overall liquidity conditions have been favorable and both long-term and short-term interest rates have fallen sharply following the policy rate cut. Fund-raising conditions have, nevertheless, remained difficult for small- and medium-sized enterprises with a low credit rating.
Taking the above economic and financial conditions into consideration, the Monetary Policy Committee of the Bank of Korea decided today to maintain the benchmark call rate (uncollateralized overnight rate) at its current level (3.5 percent) for the intermeeting period.