By Cynthia Kim and Jihoon Lee
SEOUL (Reuters) -South Korea’s central bank unexpectedly left its policy interest rate unchanged on Thursday and signalled it needs to wait for the domestic political turmoil weighing on the currency to stabilise before it can make further rate cuts.
Bank of Korea Governor Rhee Chang-yong said the rate decision reflected a need to support the won “which in part has been weakening due to political reasons” as it hit a 15-year low versus the dollar in recent weeks.
“We will be able to make a more independent decision from U.S. monetary policies to cut policy rates once (domestic) political conflicts stabilise somewhat,” Rhee said at a news conference after the policy review and decision to keep its benchmark interest rate unchanged at 3.00%.
Only seven of 34 economists polled by Reuters had forecast no change in the rate level, while the remaining 27 had expected a third consecutive 25 basis-point cut,…
