Rate cut signals crisis mode as South Korea confronts US trade policy collapse



Briefings Rate cut signals crisis mode as South Korea confronts US trade policy collapse BOK forecasts just 0.8% growth for 2025 as US court ruling throws Seoul’s negotiation strategy into uncertainty KOREA PROMay 30, 2025 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON Bank of Korea, June 26, 2024 \| Image: Korea Pro The Bank of Korea (BOK) cut its benchmark interest rate by 25 basis points to 2.50% on Thursday, citing weakening growth and easing inflationary pressure. The central bank also lowered the interest rate on its Bank Intermediated Lending Support program from 1.25% to 1.00%, effective immediately. In its policy statement, the BOK revised its 2025 GDP growth forecast down to 0.8%, a sharp downgrade from its February estimate of 1.5%. The forecast downgrade reflectsthe Korea Development Institute’s (KDI) move two weeks ago. While acknowledging that household lending and foreign exchange volatility remain elevated, the board determined that disinflationary trends © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01South Korea’s Mexico strategy runs into the hard limits of USMCA politics 02Preschool test ban forces South Korea’s English hagwons to rethink placement 03Lee Jae Myung’s Wall Street pitch tests South Korea’s capital market credibility 04US midterm clock raises stakes for South Korea’s $200 billion investment talks 05Lee’s Hormuz red line tests South Korea’s leverage in $350 billion US talks 06South Korea’s AI data center boom is colliding with the true cost of power 07Why South Korea cannot rebalance growth without stronger regional clusters 08Samsung, SK Hynix rejection exposes South Korea’s chip-grid financing problem

Briefings

Rate cut signals crisis mode as South Korea confronts US trade policy collapse

BOK forecasts just 0.8% growth for 2025 as US court ruling throws Seoul’s negotiation strategy into uncertainty

KOREA PROMay 30, 2025

Rate cut signals crisis mode as South Korea confronts US trade policy collapse

Bank of Korea, June 26, 2024 | Image: Korea Pro

The Bank of Korea (BOK) cut its benchmark interest rate by 25 basis points to 2.50% on Thursday, citing weakening growth and easing inflationary pressure. The central bank also lowered the interest rate on its Bank Intermediated Lending Support program from 1.25% to 1.00%, effective immediately.

In its policy statement, the BOK revised its 2025 GDP growth forecast down to 0.8%, a sharp downgrade from its February estimate of 1.5%. The forecast downgrade reflectsthe Korea Development Institute’s (KDI) move two weeks ago. While acknowledging that household lending and foreign exchange volatility remain elevated, the board determined that disinflationary trends

LATEST ANALYSIS

01South Korea’s Mexico strategy runs into the hard limits of USMCA politics
02Preschool test ban forces South Korea’s English hagwons to rethink placement
03Lee Jae Myung’s Wall Street pitch tests South Korea’s capital market credibility
04US midterm clock raises stakes for South Korea’s $200 billion investment talks
05Lee’s Hormuz red line tests South Korea’s leverage in $350 billion US talks
06South Korea’s AI data center boom is colliding with the true cost of power
07Why South Korea cannot rebalance growth without stronger regional clusters
08Samsung, SK Hynix rejection exposes South Korea’s chip-grid financing problem

Rate cut signals crisis mode as South Korea confronts US trade policy collapse

LATEST ANALYSIS

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