People cross a road in front of the Bank of Korea in Seoul on Aug. 27, 2020.
Jung Yeon-je | AFP | Getty Images
South Korea’s central bank kept its policy rate steady on Wednesday as it sought to keep a lid on red-hot property prices, even as it expects the economy to see the worst contraction in over two decades in
2020 due to the coronavirus pandemic.
The Bank of Korea kept the base rate steady at a historic low of 0.5%, as expected by all 34 economists in a Reuters poll. The central bank has cut rates by 75 basis points so far this year and ramped up bond-buying purchases to help the economy withstand the coronavirus fallout.
The decision to hold fire comes as Seoul’s median home prices have risen more than 50% in the past three years, despite slumping economic activity in 2020.
Asia’s fourth-largest economy