By Cynthia Kim and Jihoon Lee
SEOUL, April 10 (Reuters) - South Korea's central bank kept its policy interest rate steady on Friday, maintaining a cautious stance as the conflict in Iran threatens to heat up inflation and weigh on growth in an economy heavily dependent on Middle Eastern energy.
The Bank of Korea's seven-member monetary policy board voted to keep its benchmark interest rate unchanged at 2.50%, as expected by all 31 economists polled by Reuters.
Analysts expect no changes in the policy
rate this year as a resurgence in inflation from higher energy prices and a weaker won narrows scope for any policy support while officials assess whether domestic demand is strong enough to warrant any tightening ahead.
On the fiscal front, President Lee Jae Myung has been pushing for a 26.2 trillion won ($17.72 billion) additional budget to ease the burden on households and businesses from soaring fuel costs, after the Dubai crude benchmark more than doubled in March.
Among the 30 economists who offered a longer-term view, 26 forecast no rate change through 2026, while three expected 2.75% at year-end and one 3.00%.
"There certainly are downside risks to growth from the Middle East conflict but momentum seems to be solid for now thanks to brisk exports and a planned extra budget," said Cho Yong-gu, an analyst at Shinyoung Securities.
"I expect the BOK to stay more neutral than excessively hawkish, given we have a major supplementary budget coming."
Governor Rhee Chang-yong will hold a press conference at 0210 GMT, which will be live-streamed via YouTube.
It will be his last policy decision news conference with Shin Hyun-song, an Oxford-educated economist, nominated to helm the BOK after Rhee's term ends on April 20.
($1 = 1,478.4000 won)
(Reporting by Cynthia Kim and Jihoon Lee; Editing by Sam Holmes)
