South Korea is stepping into a monetary minefield as the global currency war intensifies, with the Bank of Korea (BOK) expected to cut interest rates by 0.25 percentage points this week in a bid to counter slowing economic growth.

While this move signals an attempt to bolster domestic demand, it also highlights the BOK’s limited room for further easing as policymakers balance inflation risks, capital flight and exchange rate volatility in an increasingly unstable global economic environment.