SEOUL, (PNA/Xinhua) — Bank of Korea (BOK), South Korea’s central bank, on Thursday picked an exit of U.S. monetary stimulus and Syrian crisis as downside risk factors.
“Downside risks remained such as uncertainties over the Fed’s QE tapering and fiscal consolidation in major economies as well as financial instability in some emerging economies and the geopolitical risk in the Middle East,” the BOK said in a statement right after freezing the policy rate at 2.5 percent.
Despite lingering uncertainties over the U.S. economy, the Fed was widely expected to scale back 85 billion U.S. dollars in its monthly bond purchases as early as in September. U.S. non-farm payrolls for August rose by 169,000, missing analysts’ estimates of an 180,000 growth.
U.S. President Barak Obama hinted at diplomatic solution over the Syrian crisis by saying he will make joint efforts with Russia and other partners to encourage Syria to give up chemical weapons, but concerns remained that the possible military strike against Syria would raise global oil prices.
Some emerging economies, especially India and Indonesia, saw their currencies drop to the record-low level to the U.S. dollar amid foreign capital exodus ahead of the expected reduction in the U.S. quantitative easing.