The Bank of Korea (BOK) said in its 2020 monetary policy direction report that it will keep in place its accommodative monetary policy stance to support the economic recovery and stabilize the headline inflation around the mid-term target of 2 percent.
The BOK lowered its 2019 growth outlook for the economy from 2.2 percent to 2.0 percent last month, cutting its forecast for this year's headline inflation from 0.7 percent to 0.4 percent.
The central bank slashed the benchmark interest rate from 1.75 percent to 1.50 percent in July, before lowering it to a record low of 1.25 percent in October.
The BOK report said South Korea's economic growth rate was forecast to stay below the economy's growth potential next year while the demand-side inflationary pressure was expected to weaken.
The bank set its 2020 growth outlook at 2.3 percent, and the 2020 headline inflation forecast at 1.0 percent.
The possible change in the benchmark interest rate next year would depend on major risk factors, financial stability and economic situations at home and abroad, the BOK report noted.
It added that uncertainties remained for the future growth path to the economy, alluding to the global trade dispute, geopolitical risks and the delayed recovery of the global chip industry.
Latest comments