The Bank of Korea left its benchmark rate unchanged for the ninth consecutive meeting on Thursday and vowed to maintain a restrictive stance to stabilize inflation at 2 percent.

The Monetary Policy Board, led by Governor Rhee Chang-yong, unanimously decided to maintain the key base rate at 3.50 percent.

“It is premature to be confident that inflation will converge on the target level”, the central bank said in the statement.

“…the Board deems it warranted to stabilize inflation on 2% by maintaining a restrictive monetary policy stance for a sufficiently long period of time,” the central bank said.

Inflation is projected to be 2.6 percent, in line with the November outlook.

Price growth is forecast to temporarily pick up slightly and then to ease moderately to the lower 2 percent range by the end of the year, the bank said.

The core inflation outlook was downgraded to 2.2 percent from 2.3 percent.

The growth projection for 2024 was retained at 2.1 percent.

Although the outlook for private consumption was downgraded, improved exports driven by strong shipments to the U.S. and the recovery in the semiconductor industry offset the downward pressure.

With inflation concerns easing and the economy to grow by a below consensus 2.0 percent, the central bank is likely to start sounding more dovish, Capital Economics economist Gareth Leather said.