SEOUL, South Korea (AP) — South Korea's central bank slightly lowered its growth forecast for Asia's fourth-largest economy but left its key interest rate unchanged.
Bank of Korea said Thursday that South Korea's economy will expand 2.6 percent this year, slower than its January forecast of 2.8 percent.
The central bank attributed the lower forecast to a downgrade in the global economic outlook and the yen's slide which gives Japanese exporters an advantage over their South Korean competitors.
The growth forecast cut was not severe enough to justify lower interest rates.
Bank of Korea left its key interest rate at 2.75 percent for a sixth month despite market expectations it would join the government's stimulus efforts by lowering borrowing costs.
Gov. Kim Choong-soo said South Korea's economy is on track for a slow recovery.