BOK keeps rates steady at 3% in first 2025 decision

Bank of Korea Gov. Rhee Chang-yong at the Monetary Policy Board meeting on Jan. 16 at the central bank in Jung District, central Seoul. [JOINT PRESS CORPS]

 
The Bank of Korea (BOK) kept the interest rate unchanged at 3.00 percent on Thursday during its first rate-setting meeting of the year, as the won continued to trade weakly against the dollar.  
 
The decision comes after two consecutive 25-basis-point cuts in October and November.
 

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Sixty percent of bond experts, including analysts, expect the BOK’s Monetary Policy Board to hold the rate steady, according to a survey by the Korea Financial Investment Association (Kofia) released Tuesday. This marked a decline from the 83 percent of respondents with the same prediction ahead of the previous rate-setting meeting in November.
 
The remaining 40 percent forecast a 25-basis-point rate cut in January.
 
”While respondents who expected the rate to be held steady outnumbered those who anticipated otherwise, the number of respondents expecting a rate cut to stimulate weak demand has increased from the previous meeting due to rising concerns surrounding the slowing economy,” said Kofia on Tuesday.
 
Korea’s headline inflation rose 1.9 percent in December on a yearly basis, an acceleration from the previous month’s 1.5 percent gain.
 
The won has depreciated significantly through December amid the global strengthening of the dollar, with President Yoon Suk Yeol’s martial law declaration on Dec. 3 and subsequent political turmoil further pushing the local currency to a 15-year low by the year-end.
 
In the previous Monetary Policy Board Meeting in November, the central bank surprised the market with an unexpected 25 basis point cut, prioritizing the growth over the volatile foreign exchange market situation.
 

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]