S. Korea's central bank keeps base rate at 1.5%

SEOUL • South Korea's central bank head yesterday acknowledged the softening economy may warrant a policy easing soon but declined to signal any immediate action, citing heightened uncertainty over the global economy.

The Bank of Korea's monetary policy committee held its base rate steady at a record low 1.5 per cent, as expected by analysts. A split vote and the governor's bearish tone lifted bond futures, although gains were limited.

Governor Lee Ju Yeol said that even if the central bank opted to ease monetary policy "the resulting effect of lower interest rates is uncertain due to external unrest".

He said South Korea's economic recovery was faltering mainly because of unfavourable conditions in other countries.

REUTERS

India may seize Vodafone's assets

NEW DELHI • India said it may seize Vodafone Group's assets in the country if the company does not pay a disputed 142 billion rupee (S$3 billion) tax bill that is still undergoing international arbitration proceedings, according to a copy of the notice that was sent to the company this month.

Deputy commissioner of income tax Anil Sant informed the company's Dutch unit of its dues in a letter dated Feb 4. Spokesman Ben Padovan at Vodafone and a representative at India's tax department declined to comment.

Vodafone has been fighting the Indian tax authorities for years over its 2007 purchase of billionaire Li Ka Shing's mobile phone business in the country in a case that analysts have said may influence foreign investors' perceptions about India.

BLOOMBERG