South Korea seems to be taking an approach to its economic growth and interest rates that mirrors the United States’. The country is keeping interest rates at record lows because the recovery is still viewed as “fragile.” Sound familiar?

The South Korean economy is playing it safe in terms of boosting any interest rates, lest rate hikes interrupt any growth progress. Kelly Olson for Associated Press reports that the South Korean government has repeatedly expressed concerns about the risks of a too-early exit by the Bank of Korea from a series of rate cuts in late 2008 that have lowered borrowing costs to a record low 2%. [5 ETFs for an Electronics Comeback.]

The government is taking an approach similar to our own: first, get the fundamentals in place, the accommodate economic policy as necessary. This cautious attitude could help ensure that any recovery so far is not undone by premature moves to tighten monetary policy.

South Korea’s stock market is one of the most undervalued in Asia, which could spell opportunity.

Bernama reports that the South Korea’s stock market has a relative valuation lower than any Asian economy. Japan is at the top, followed by Hong Kong. India, Malaysia, Taiwan, Singapore, Philippines and Indonesia were ahead of China. [What South Korea’s ETF Has Going for It.]

For more stories about South Korea, visit our South Korea category.

  • iShares MSCI South Korea (NYSEArca: EWY)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.