(Updates with more comments from BOK governor)
SEOUL, April 13 South Korea's central bank kept
interest rates unchanged for a 10th straight month on Thursday,
wary of geopolitical risks around North Korea and ahead of a
much-anticipated U.S. Treasury report on foreign currency
Following are key remarks from Bank of Korea Governor Lee
Ju-yeol's news conference, translated by Reuters:
"The Monetary Policy Board of the Bank of Korea decided
today to leave the Base Rate unchanged at 1.25 percent for the
"Looking at the real economy, growth has expanded somewhat
even though consumption remained weak."
"Exports and facility investment are leading the economic
"The prospects for economic recovery are bright short-term,
but there are plenty of uncertainties (ahead).
"Geopolitical risks have increased financial market
"While price volatility has expanded in the financial
markets, what will happen next depends on how the situation
unfolds. So even for me it's hard to see the direction (for the
economy) from geopolitical risks."
"While the CDS premium has risen somewhat of late, its not a
huge increase so its premature to link this to rumours about an
economic crisis coming in April."
"The main reason (behind the recent rise in credit default
swap premiums) is with higher demand for CDS for hedging
purposes among foreign investors who bought Korean bonds as
local banks and companies have been increasing offshore bond
"The need to cut interest rates has diminished compared with
before. But as there are geopolitical risks and other
uncertainties; we will keep (monetary policy) accommodative to
continue to support the economic recovery."
"I’m not too concerned about inflation growing sharply like
it did before, as price pressure isn’t that big."
(Reporting by Cynthia Kim; Editing by Sam Holmes)