Summary
- The Bank of Korea said it decided to keep the base rate at 2.50% per annum, marking a sixth straight hold.
- It said the need for rate cuts is low, given an upward revision to this year’s growth outlook and financial-stability concerns such as the exchange rate and household debt.
- It said the decision aligns with forecasts, as all 20 experts expected the base rate to be held.
The Bank of Korea decided to keep the base rate at 2.50% per annum. It opted to hold rates for a sixth consecutive meeting after cutting the base rate by 0.25 percentage point from 2.75% per annum in May last year.
The decision is seen as reflecting a reduced need for rate cuts to support the recovery after the bank raised its growth forecast, while also taking into account lingering factors that could weigh on financial stability, including the exchange rate and household debt.
The move aligns with the results of a survey conducted earlier by The Korea Economic Daily’s Hankyung Economist Club, in which all 20 experts predicted the rate would be left unchanged. Lee Nam-kang, an economist at Korea Investment Holdings, cited the "possibility that this year’s growth outlook could be revised upward," adding that "given the macroeconomic environment and financial-stability conditions, there is very little incentive to cut the base rate."
Reporter Kang Jin-kyu josep@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
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