* All 28 analysts surveyed found the baseline stable
* Analysts see BOK retention rates stable throughout 2021
* Governor’s press conference to be broadcast at 0220 GMT
SEOUL, Jan 15 (Reuters) – South Korea’s central bank kept its policy rate unchanged on Friday as partial recovery in Asia’s fourth-largest economy allowed policymakers to stay on the elbow.
Bank of Korea kept the base rate stable at a historically low level of 0.5%, as expected by all 28 analysts in a Reuters poll.
The BOK is expected to maintain its easy monetary policy in 2021 even as the economy accelerates away from last year’s pain caused by the coronavirus.
Twenty of 23 analysts surveyed will see the bank’s retention rates before the end of this year, as policymakers will want to ensure the recovery is stable before even considering a tightening policy.
Hanging over policy negotiations is the third wave of coronavirus currently sweeping the country, a weak labor market and tight inflation.
“As stated in BOK’s previous monetary policy statement, it is critical for the bank to maintain its current easy-to-maintain policies to support growth,” said Yoon Yeo-sam, an analyst at Meritz Securities, which sees the BOK raise rates just in the second half of 2022.
“The timing of vaccine roll-out is uncertain but the downward risk (to growth) is not high enough to cut growth forecasts by around 3% this year.”
The heavy-duty manufacturing economy is seen to be declining 1.1% in 2020, the first contraction in 22 years, before expanding 3.0% this year, according to the BOK.
While export earnings are gaining traction, the outlook for employment and inflation is more cloudy.
In his New Year’s message, Governor Lee Ju-yeol said he was in no hurry to get off the gas to help the economy recover from a pandemic, especially with that new viral changes and global trade risks are scoring out the export-dependent economy.
Governor Lee’s press conference will be broadcast at 0220 GMT. (Reporting by Cynthia Kim; Editing by Sam Holmes)