S.Korea holds rates steady

S.Korea holds rates steady

SEOUL: South Korea's central bank on Thursday kept its key
interest rate target for October steady for a third consecutive
month in an effort to support exports, setting aside for the
moment widespread concerns over soaring property prices.

The Bank of Korea (BoK) held the key overnight interbank rate
unchanged at 3.75 percent, citing growing inflationary pressure
and the won's rise against the U.S. dollar.

"We've decided to hold steady call rates this month as a rate
hike to curb rising real estate prices, as demanded by the
public, will make the ongoing economic slump worse," BoK governor
Park Seung said.

He said a rate hike would put the economy in a more difficult
situation and accelerate the won's appreciation, which makes
South Korean products more expensive abroad.

"A rate hike could worsen the country's unemployment problem
and lead to the the won's further rise against the dollar," Park
said.

The Korean currency has jumped nine percent against the dollar
since hitting a 2003 low in early April. -- AFP