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BOK Hikes Call Rate to 4%
Korea-US Interest Rate Gap Narrowed to 0.5 Percentage Points


The Bank of Korea (BOK) Thursday raised its benchmark short-term call rate by 25 basis points to 4.0 percent, the third rate hike in five months, sending a clear signal to the market that it is confident of economic recovery.
BOK Governor Park Seung said the pace of recovery in the manufacturing and service sectors is faster than expected, and that domestic consumption and plant equipment investments are making solid growth. He said the economy is expected to achieve its potential growth rate of 5 percent this year despite the won's appreciation against the dollar and high oil prices.

``South Korea has entered a normal recovery track, where economic growth, consumer prices and exports are in better shape,'' Park said, emerging from the monthly rate-setting meeting of the BOK's Monetary Policy Committee.



# The Korea Times [February 10, 2006]
- By Na Jeong-ju