SEOUL – The Bank of Korea (BOK) announced on Thursday its decision to keep the benchmark interest rate unchanged at 2.50%, a move widely anticipated by financial markets. This decision aligned with the expectations of most analysts, with 27 out of 35 experts surveyed by LSEG correctly predicting the central bank’s hold.
The BOK’s stance comes as inflation in South Korea shows signs of moderating. The headline Consumer Price Index (CPI) rose 2.1% year-over-year in July, settling just slightly above the Bank of Korea’s target of 2.0%. Analysts are projecting that inflation will remain close to this target level throughout the remainder of 2025.
The combination of anticipated weaker economic growth and subdued energy prices is expected to keep price pressures contained in the coming months. This economic environment suggests that the central bank may retain flexibility for additional rate cuts as part of its current easing cycle, should conditions warrant further monetary stimulus.
