South Korea stands pat on rates

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BankofKorea A man gets on a bicycle in front of the Bank of Korea in Seoul.

Seoul - South Korea's central bank on Thursday kept held interest rates at 2.5 percent for the 11th consecutive month, citing signs of recovery at home and abroad and uncertainty about the US Federal Reserve's stimulus.

“Global economy is expected to continue moderate recovery, but there still are lingering risks as the US Fed's possible change of monetary policy can... pummel growth of emerging economies,” the bank said in a statement.

The Fed's huge asset-purchase scheme has provided support to emerging economies as it has provided much-needed foreign investment in countries such as South Korea.

The Bank of Korea has not touched the key rate since an unexpected 25 point cut in May last year.

The South's export-reliant economy - the Asia's fourth-largest - was hit badly by sluggish demand in the aftermath of the global recession.

But it has picked up in recent years, growing three percent in 2013 and 2.3 percent the year before.

It has tipped 3.8 percent growth in 2014, bolstered by government stimulus spending and improving demand from overseas markets.

Inflation has remained well below the bank's target range of 2.5 to 3.5 percent for nearly two years. - Sapa-AFP

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