Bank of Korea holds interest rate, with eye on possible US Fed move

SEOUL – The Bank of Korea had held the interest rate at 1.5%, with the Monetary Policy Board (MPB) maintaining a seemingly posistive attitude on the economic outlook - stressing an improvement in domestic consumption.

BOK Governor Lee Ju-yeol reiterated a need to watch for a possible spillover from a potential interest rate hike by the US Fed, noting that this may raise difficulties for indebted corporates.
Lee also dismissed the case for a zero rate policy for Korea, indicating that no quantitative easing or revaluation is needed to mitigate a deflationary spiral.
ANZ Bank says it believes the BOK will remain hesitant to cut interest rates in the near term.. However, ANZ is maintaining its view that Korea should ease monetary policy, given a negative output gap. www.live.anz.com (ATI).