Think-tank urges S Korea to cut rates

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SEOUL, Feb 17 (AFP): An influential think-tank today urged the central Bank of Korea to cut interest rates quickly to prevent market instability stemming from wide interest rate gaps with the United States.
In a report published today, the Korea Institute of Finance (KIF) noted that foreigners have been snapping up South Korean bonds to capitalise on the country's high interest rates compared with those of the United States.
"In light of foreigners' rush to the local bond market, the Bank of Korea (BoK) should cut the interest rate in a pre-emptive manner," the think-tank said.
"If the interest rate gap between South Korea and the United States lasts for a long period, it could come as a destabilising factor for the local bond market."