SEOUL, April 30 (Reuters) - South Korea's central bank held interest rates steady in a 4-3 vote with Governor Kim Choong-soo casting the final vote to keep rates unchanged while three board members called for a cut, minutes released on Tuesday showed.
Monetary policy members Ha Sung-keun, Chung Hae-bang and Chung Soon-won voted to cut rates at the April 11 meeting, citing the need for lower interest rates in response to Japan's massive monetary easing and the South Korean economy taking longer than expected to recover.
'The need to amplify the effects of a policy mix is high...while consumer price inflation is undershooting the central bank's target inflation band,' an unnamed board member who voted for a rate cut was quoted in the minutes as saying.
Volatility in South Korean markets stemming from tensions with North Korea throughout March was also mentioned as a risk factor by board members who voted to lower interest rates.
The Japanese yen has weakened more than eight percent against the Korean won this year on Japan's aggressive easing policy, while annual inflation remains far below the central bank's target band of 2.5 to 3.5 percent.
All three dissenting members voted for a cut of 25 basis points to the current base rate of 2.75 percent.
The minutes are released two weeks after board meetings and the discussions they document are kept anonymous. In the case of a split vote among the six board members, the Bank of Korea governor has a casting vote to break the deadlock.
In April's case, Governor Kim Choong-soo voted to keep the policy rate unchanged at the meeting, pushing down government bonds which had their worst day in more than two years after the surprise decision.
Kim made the decision amid immense pressure from the government and lawmakers to cut rates, who said a rate cut would complement the government's expansionary fiscal policy and boost domestic growth.
It was the first such split vote since August 2006, when three board members voted to hold rates while four, including Lee Seong-tae, who was the central bank governor at the time, voted to hike rates.
(Reporting by Christine Kim; Editing by Eric Meijer) Keywords: KOREA ECONOMY/RATES
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