
The Bank of Korea (BOK) lowered its key interest rate by 0.25 percentage points, Friday, ending a three-year and two-month rate freeze. This move reflects the stabilization of domestic inflation and aligns with similar actions by major economies like the U.S. and Europe.
Further reductions, however, are unlikely this year due to persistent concerns about high household debt, according to market watchers.
The BOK’s monetary policy board reduced the rate from 3.5 percent to 3.25 percent, narrowing the interest rate gap with the U.S. to 1.25 percent.
Gov. Rhee Chang-yong noted that while 스포츠 there is room for further cuts, any future decisions will be closely tied to financial stability, cautioning that this latest cut should be viewed as “hawkish.”
The central bank has assessed that maintaining a restrictive rate for an extended period is no longer necessary at this moment, especially as consumer price inflation dropped to 1.6 percent in September, driven largely by falling petroleum prices.
“Unless there are major changes, such as geopolitical risks in the Middle East, no significant shifts in the inflation trajectory is expected,” Rhee said.