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1st LD Writethru: S.Korea freezes policy rate at record low of 1.5 pct

Xinhua, July 9, 2015 Adjust font size:

South Korea's central bank on Thursday kept its policy rate on hold at an all-time low of 1.5 percent after lowering it by a quarter percentage point the prior month to counter flagging domestic demand caused by the outbreak of Middle East Respiratory Syndrome (MERS).

Bank of Korea (BOK) Governor Lee Ju-yeol and six other policy board members decided to freeze the benchmark seven-day repurchase rate at 1.5 percent to wait and see the effect of fiscal and monetary stimulus packages.

The BOK cut the rate below 2 percent in March for the first time in history after lowering it by 25 basis points in August and October last year respectively. The rate was cut again to 1.5 percent last month.

The 1 percentage-point cut made in the past 12 months led almost all experts to predict the rate on hold in July. According to a Korea Financial Investment Association (KFIA) poll of 114 fixed-income experts, 98.2 percent of the respondents predicted the rate freeze. Endi