South Korea’s central bank on Friday decided to keep the country’s benchmark interest rate unchanged for the eighth month despite a palpable sense of relief among officials that the country had weathered the global economic storm.

A surprise move by Australia to raise rates on Tuesday fuelled speculation that Seoul would be the next major economy to tighten monetary policy. A huge improvement in exports has led to the government predicting a 4 per cent growth in gross domestic product next year, recovering from a forecast 1.5 per cent contraction this year.