South Korea Interest Rate

The Bank of Korea (BoK) maintained its base rate at 2.75% during its April 2025 meeting, following a 25 bps cut in February aimed at stabilizing the currency amid new U.S. tariffs, aligning with market expectations. Borrowing costs remained at their lowest level since September 2022, amid efforts to stabilize inflation, address weak economic growth, and manage the impact of potential global economic fallout—all while preparing for a presidential election. Additionally, the central bank revised its growth forecast for this year to below 1.5%, down from the 1.5% projected in February, citing the effects of U.S. tariff policy changes, domestic political uncertainty, and the implementation of government stimulus measures. Meanwhile, policymakers kept their inflation forecasts steady, projecting headline inflation at 1.9% and core inflation at 1.8% for the year. In March, annual inflation accelerated slightly to 2.1%, remaining close to the Bank of Korea's medium-term target of 2%.