FX.co ★ BoK Keeps Rates Steady for 5th Straight Meeting

The Bank of Korea (BoK) decided to maintain its base rate at 2.50% during its initial policy meeting of 2025, marking the fifth consecutive hold. This decision aligns with market expectations and reflects apprehensions regarding a depreciating exchange rate and an increasingly heated housing market. The Korean won experienced a near 2% decline within the first two weeks of the year, heightening the potential for increased consumer prices. Recent figures indicate that South Korea's inflation rate sits at 2.1% for 2025, a slight reduction from 2.3% in 2024, but it remains above the BoK's target of 2%. Since October 2024, the central bank has reduced rates by an aggregate of 100 basis points to bolster economic growth.