SEOUL • South Korea’s central bank left its key interest rate unchanged as the outlook for Asia’s fourth-largest economy weakens amid falling exports, soft jobs growth and waning inflation.

The Bank of Korea (BoK) kept the seven-day repurchase rate at 1.75% yesterday, as forecast by all 26 analysts surveyed by Bloomberg. Most economists expect the BoK to leave borrowing costs where they are for the rest of year.

Governor Lee Ju-yeol said at the January policy meeting that it wasn’t the right time to consider cutting interest rates, although he conceded that uncertainties are rising over the global economic outlook, trade and US interest rates.

The central bank has said economic indicators suggest the prolonged trade dispute between Washington and Beijing is already having a negative impact on South Korea. Lee lowered the BoK’s 2019 growth and inflation projections last month to 2.6% and 1.4% respectively.

“Ongoing weakness in exports and the soft labour market are likely to keep most members’ stance cautious,” Angela Hsieh, a Singapore-based economist at Barclays Bank, said before the decision. “The bank will probably attempt to balance its rhetoric by highlighting a possible positive outcome from US-China trade talks, improved sentiment in financial markets and slower US Federal Reserve normalisation potentially mitigating some downside risks to the economy.”

Inflation in January slowed to 0.8%, less than half the BoK’s 2% target. — Bloomberg