DHAKA: South Korea’s central bank on Thursday slashed its 2015 economic growth forecast and kept its benchmark interest rate unchanged at a record low amid growing concerns of deflation.

Bank of Korea (BOK) Governor Lee Ju-Yeol put the new estimate for Asia’s fourth-largest economy at 3.4 percent growth this year, compared to an earlier forecast of 3.9 percent, reports The Straits Times.

The bank decision to leave its key rate unchanged at 2.0 percent was widely expected, although some analysts had predicted a cut of 25 basis points to boost tepid domestic consumption and ease deflation concerns stemming from low oil prices.

The South imports almost all of its energy needs from overseas, and a recent plunge in oil prices saw inflation hit 0.8 per cent in December, the lowest rate for 15 years and far below the BOK’s target range of 2.5 to 3.5 percent.

BDST: 1818 HRS, JAN 15, 2015