South Korea’s central bank hints at two more interest rate cuts this year

The Bank of Korea (BOK) hinted today at two more interest rate cuts this year, 2025, in an effort to stimulate economic growth.

Yonhap News Agency quoted the Bank of Korea (BOK) as suggesting this proposal in its latest monetary policy report, noting that the policy focus will be on how to mitigate downward pressures on economic growth while maintaining price stability.

The BOK cut its key interest rate by a quarter percentage point to 2.75% late last month, marking the third cut in the current monetary easing cycle following the bank’s monetary policy shift in October of last year.

“It is appropriate to focus our monetary policy on easing downward pressures on the economy in light of the current weak economic growth outlook,” the bank said.

It noted that the timing and pace of further interest rate cuts will be determined after closely monitoring household debt, housing prices, the foreign exchange rate, and other conditions related to financial stability. In its latest forecast, announced last month, the Bank of Korea projected 1.5% annual growth for the South Korean economy by 2025, a 0.4 percentage point decrease from its previous forecast.