SEOUL, Sept. 12 (UPI) -- The Bank of Korea, for the fourth straight month, Thursday left the seven-day repo rate, the country's key interest rate, unchanged at 2.5 percent.
The decision, widely expected, came as there is speculation the U.S. Federal Reserve may soon begin to cut its monetary stimulus with signs of improving economy.
"For now, the Fed's tapering risk is seen as having a limited impact on Korea's markets as the economic fundamentals are viewed as sound," Bank of Korea Gov. Kim Choong-soo told a news conference, Yonhap News Agency reported. "But we will not let down our guard."
Any tapering of the U.S. Fed's monetary policy would bring to an end the flow of cheap money into emerging economies and lead to flight capital.
The central bank maintained a positive view of the recovery of the Korean economy, but also cited geopolitical risks in the Middle East among major downside risks.
The South Korean economy, Asia's fourth-largest after China, Japan and India, grew 1.1 percent in the second quarter.
