International News

SEOUL, (MILLAT+APP/AFP) – South Korea held its key
interest rate unchanged on Thursday, despite an earlier US hike, as an ongoing political crisis tightened the reins on an already-slowing economy.
In a move widely expected by analysts, the central Bank of Korea held
its benchmark rate at its record-low of 1.25 percent for the sixth straight month.
South Korea has been struggling with soaring household debt and
rising youth unemployment at a time when its economy is expanding at the slowest pace in recent years.
The decision came just hours after the US Federal Reserve increased
its borrowing cost for the first time this year to 0.75 percent,
The rate hike, coupled with uncertainties posed by the incoming
Donald Trump administration, could further cloud South Korea’s economic prospects.
Following a meeting held shortly after the US Fed decision, South
Korea’s finance ministry said the rate hike could “increase volatility” in the South Korean financial and foreign exchange markets.
Domestic markets are already under pressure because of political
uncertainty triggered by a snowballing corruption scandal that led to
parliament voting to impeach President Park Geun-Hye last week.