South Korea's central bank said it will maintain accommodative monetary policy stance in 2015.
The bank expects inflation to remain low for a considerable time amid an only modest recovery of domestic economic activity, the Bank of Korea said in a statement on Wednesday.
Due to the moderation of demand-side downward pressures and a base effect, consumer price inflation is expected to pick up gradually. The bank said it will set the medium-term inflation target for 2016 onward, seeking the appropriate level of inflation.
«The Bank will keep a constant check on the possibility of the destabilization of financial and foreign exchange markets arising from volatile capital flows and the accumulation and qualitative deterioration of household debt,» the bank said.
Further, the bank vowed to pay close attention to the possibility that the prolongation of the accommodative monetary policy stance intensifying financial imbalances and delaying the restructuring of marginal businesses.
According to central bank, the financial and foreign exchange markets are likely to see increased volatility in price variables.
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