South Korea’s central bank left its key interest rate at a record low for the ninth straight month yesterday, pledging to maintain low borrowing rates to help extend a recovery in Asia’s fourth-largest economy.
The Bank of Korea decision to keep the benchmark seven-day repurchase rate at 2 percent came at a monthly policy meeting and was in line with expectations.
The bank’s monetary policy committee said in a statement that it would stick to its “accommodative policy stance for the time being with an emphasis on sustaining the recovery of economic activity.”
The wording was broadly similar to last month’s statement.
South Korea’s economic recovery, rising housing prices and the decision last month by Australia’s central bank to lift rates had created expectations the Bank of Korea might raise its rate last month.
However, the bank at the time largely doused speculation an increase would come before the end of the year by offering no fundamental change in wording in its policy statement.
Goldman Sachs’ economist Kwon Goohoon said in a report yesterday that a rate hike would probably come in the first three months of next year and any increases are “likely to be gradual and moderate.”
The central bank slashed the rate six times since more than a year ago to help battle the effects of the global financial crisis.
South Korea has recorded three straight quarters of growth since contracting 5.1 percent in the final three months of last year. It grew 2.9 percent in the third quarter ended Sept. 30, the strongest quarterly performance in more than seven years.
Meanwhile, Beijing will yesterday, despite mounting evidence the world’s third largest economy has rebounded strongly from the global crisis.
“China’s economic recovery trend has continued to consolidate but it still faces a few difficulties and problems,” Wen told a forum in Beijing on the 2010 World Expo in Shanghai.
“We will continue to implement the active fiscal policy and moderately loose monetary policy ... to facilitate the fast and steady growth of the Chinese economy,” he said, according to a transcript of his speech posted on the Shanghai Expo’s Web site.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
STUMPED: KMT and TPP lawmakers approved a resolution to suspend the rate hike, which the government said was unavoidable in view of rising global energy costs The Ministry of Economic Affairs yesterday said it has a mandate to raise electricity prices as planned after the legislature passed a non-binding resolution along partisan lines to freeze rates. Chinese Nationalist Party (KMT) lawmakers proposed the resolution to suspend the price hike, which passed by a 59-50 vote. The Taiwan People’s Party (TPP) voted with the KMT. Legislative Speaker Han Kuo-yu (韓國瑜) of the KMT said the resolution is a mandate for the “immediate suspension of electricity price hikes” and for the Executive Yuan to review its energy policy and propose supplementary measures. A government-organized electricity price evaluation board in March
NOVEL METHODS: The PLA has adopted new approaches and recently conducted three combat readiness drills at night which included aircraft and ships, an official said Taiwan is monitoring China’s People’s Liberation Army (PLA) exercises for changes in their size or pattern as the nation prepares for president-elect William Lai’s (賴清德) inauguration on May 20, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. Tsai made the comment at a meeting of the Legislative Yuan’s Foreign Affairs and National Defense Committee, in response to Democratic Progressive Party (DPP) Legislator Wang Ting-yu’s (王定宇) questions. China continues to employ a carrot-and-stick approach, in which it applies pressure with “gray zone” tactics, while attempting to entice Taiwanese with perks, Tsai said. These actions aim to help Beijing look like it has
China is mischaracterizing UN Resolution 2758 for its own interests by conflating it with its “one China” principle, US Deputy Assistant Secretary for China and Taiwan Mark Lambert said on Monday. Speaking at a seminar held by the German Marshall Fund, Lambert called for support for Taiwan’s meaningful participation in the international community at a time when China is increasingly misusing Resolution 2758. The resolution had a clear impact when it changed who occupied the China seat at the UN, Lambert said. “Today, however, the PRC [People’s Republic of China] increasingly mischaracterizes and misuses Resolution 2758 to serve its own interests,” Lambert said. “Beijing