South Korea's central bank left its key interest rate unchanged on Thursday, as a stronger currency hurts exports and core inflation moderates.
Uncertainty surrounding the economic problems in the US and Europe was also cited as one of the reasons for the pause in the monetary tightening.
Governor Kim Choong Soo and the policy board left the seven-day repurchase rate at 2.5 percent, the central bank said in a statement in Seoul today.
The move to leave interest rates steady was in line with most economists' prediction.
The Bank of Korea had raised its benchmark rate by quarter percentage-point each in July and November from a record-low 2%.
The central bank said today that upward pressures on prices are expected to continue due to a run-up in global raw material prices.
The domestic economy is expected to continue on an underlying upward track, even in the presence of external risk."
However, the Bank of Korea said that looking ahead, the possibility of heightened volatility of economic activity in major countries due to sovereign debt problems in Europe can't be ruled out.
The won rose 0.8% to 1,137.40 per dollar as of 12:28 p.m. in Seoul.
The currency is up about 35% since March last year, the most in Asia.
The benchmark Kospi stock index gained 1.2% to 1,979.85.
