The Bank of Korea decided to keep its benchmark interest rate steady on Thursday, navigating the challenging waters of stagnant economic growth while attempting to stabilize the nation’s currency amid ongoing uncertainties triggered by the United States’ extensive tariff measures.
In Seoul, the Bank of Korea’s monetary policy committee maintained the key rate at 2.75 percent. This decision came after a quarter-point rate cut in February, the third since the BOK initiated its monetary easing in October 2024, marking a break after three years since the August 2021 adjustments.
The move underscores the central bank’s commitment to financial stability, reflecting the current balancing act between fostering economic expansion and ensuring market safety. Recent weeks have seen increased volatility in both financial and foreign exchange markets, primarily fuelled by the Trump administration’s erratic tariff strategies.
Experts noted that the interest rate disparity between South Korea and the U.S., which is up to 1.75 percentage points, presents a risk of further devaluation of the Korean won if the gap widens further.
