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Bank of Korea maintains base rate at 1.50%

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Bank of Korea maintains base rate at 1.50%

Bank of Korea's monetary policy board decided to keep its base rate unchanged at 1.50% as inflation remained below the 2% target, dimming prospects for interest rate increases in the coming months.

"As it is forecast that inflationary pressures on the demand side will not be high for the time being, while the domestic economy is expected to continue its solid growth, the Board will maintain its accommodative monetary policy stance," the board said in its decision.

The economy remains on track to grow 3% in 2018 amid favorable movements in consumption and exports, although investment and employment growth have slowed.

Consumer price inflation, or CPI, has been in the mid-1% level, mainly due to increases in agricultural products' prices. The bank expects the CPI to rise and gradually approach the set target from the second half of 2018. It also expects core inflation to rise gradually.

The bank expects consumption to increase steadily. Exports are also expected to sustain their growth on the back of a buoyant global economy.