South Korea’s central bank kept interest rates unchanged as widely expected on Thursday as a tumbling won reduced the scope for further easing and policymakers waited to see how the government’s steps to cool Seoul’s property market play out.
The Bank of Korea’s monetary policy board voted to keep the benchmark interest rate unchanged at 2.50%, in line with expectations.
It also raised both growth and inflation forecasts for this year to 1.0% and 2.1%, respectively. For 2026, the BOK sees the economy expanding 1.8% and headline inflation at 2.1%.
Analysts have pushed back the next predicted cut to the first quarter of next year from late this year as they expect policymakers to pay more attention to a declining won and rising financial stability risks from persistent housing price gains in Seoul.
U.S. stock buying by local residents and pension funds pushed the won almost 4% lower this quarter, making it the second-worst performing Asian currency after the yen.
