By Kim Deok-hyun
SEOUL, Nov. 26 (Yonhap) -- The South Korean central bank on Thursday held its policy rate unchanged at a record low of 0.5 percent, amid growing concerns over a winter wave of coronavirus infections.
As expected, the monetary policy board of the Bank of Korea (BOK) voted to leave the base rate steady in this year's final rate-setting meeting.
In late August, the BOK froze the key rate as economic uncertainty heightened amid a flare-up in new coronavirus cases. In July, the bank left the rate unchanged as well.
To bolster the pandemic-hit economy, the BOK slashed the key rate to the all-time low of 0.5 percent in May after delivering an emergency rate cut of half a percentage point in March.
Analysts said economic uncertainty has increased as daily new virus cases have recently stayed above 300, although the nation has largely brought the outbreak under control.
Financial markets will focus on the BOK's economic outlook revision later in the day.
In August, the BOK revised down its 2020 growth outlook to a sharper-than-expected contraction of 1.3 percent, citing the impact of a resurgence in virus cases.
In the worst scenario, in which the flare-up in COVID-19 cases continues into the winter, the BOK forecast the South Korean economy to retreat 2.2 percent this year.
The central bank said private consumption is expected to recover at a slower-than-expected pace this year due to the virus fallout.
South Korea's economy contracted 3.2 percent in the second quarter from three months earlier after shrinking 1.3 percent on-quarter in the January-March period.
But the nation's economy returned to modest growth in the third quarter, marking the first quarterly expansion since the coronavirus pandemic began, as exports showed signs of improvement.
In the July-September period, the economy grew 1.9 percent from the previous quarter.
South Korea's low inflationary pressure and rising housing prices also appeared to prompt the BOK board to stand pat, analysts said.
(News Focus) S. Korea drums up measures to revive consumption, create jobs next year amid pandemic
S. Korean companies bet big on hydrogen for zero-emission goal
S. Koreans feel pinch of rising housing costs amid economic downturn
Korean Air's Asiana takeover heralds seismic shift; bumpy roads lie ahead for completion
(News Focus) Biden's victory heralds more multilateral approach, environment, pro-labor policies in focus