Sun, 07 Mar 2021

SEOUL, Jan. 15 (Xinhua) -- South Korea's central bank on Friday froze its policy rate at a record low for eight straight months amid lingering uncertainty over the COVID-19 pandemic.

Bank of Korea (BOK) Governor Lee Ju-yeol and six monetary policy board members decided to leave the benchmark seven-day repurchase rate unchanged at an all-time low of 0.50 percent. The rate was kept on hold since May 2020.

The rate freeze decision was in line with market expectations. According to a Korea Financial Investment Association survey of 100 fixed-income experts, all predicted the rate on hold.

Uncertainty remained over the COVID-19 pandemic amid the still high number of daily infections.

In the latest tally, South Korea reported 513 more cases of COVID-19 for the past 24 hours, raising the total number of infections to 71,241.

The daily caseload stayed below 600 for five straight days, but it hovered above 100 since Nov. 8. The daily number of infections peaked at 1,240 on Dec. 25 last year.

To contain the virus spread, the government decided to maintain its five-tier social-distancing guideline in the Seoul metropolitan area at the second-highest level for six weeks through Jan. 17, hitting hard the services industry.

All the other areas, which exclude the capital region, were placed under the third-highest Level 2.0 social-distancing regulations.

Credit card spending was estimated to have reduced 16.2 percent in December from a year earlier, after sliding 2.4 percent in October and 4.2 percent in November respectively.

The index for sentiment among consumers over economic situations plummeted 8.1 points over the month to 89.8 in December.

Under the second-highest Level 2.5 distancing, high-risk facilities such as karaoke bars, indoor sports facilities, night clubs and private cram schools were forced to stop operation, while such brick-and-mortar businesses as restaurants, coffee shops, cafes and beauty salons were allowed to open with restrictions.

The nationwide ban on a gathering of five or more people has been kept in place to discourage people from having a year-end party or a private meeting at the beginning of the new year.

To financially support about 2.8 million small-business owners, the government began Monday to offer relief checks of between 1 million won (910 U.S. dollars) and 3 million won (2,730 U.S. dollars).

The relief grant was not enough to cover the losses of the self-employed as it is less than a monthly rent for mom-and-pop stores especially in the Seoul capital area.

Meanwhile, export propped up the economy. Outbound shipment advanced 12.6 percent in December from a year earlier, keeping an upward trend for the second consecutive month.

It was the first double-digit increase of export in 26 months owing to solid demand for tech products such as chips, display panels and smartphones.

Amid the prolonged record-low policy rate, debt owed by households to banks recorded the highest yearly increase of 100.5 trillion won (91.5 billion U.S. dollars) in 2020.

With borrowed money, households rushed to purchase new home and invest in stocks, raising worry about bubbles in the housing and stock markets.

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