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Analysis BOK faces narrow policy options as currency volatility tests growth, stabilityCentral bank holds policy rate steady at 2.5% as won’s depreciation constrains monetary freedom The Bank of Korea (BOK) kept its base rate unchanged at 2.5% on Thursday for the fourth consecutive meeting, a decision that underscores how intensifying foreign exchange (FX) volatility is narrowing Seoul’s policy choices. The central bank’s announcement landed amid persistent depreciation pressures on the won and rising concern that the BOK may have reached its limit in its ability to support domestic growth while avoiding financial instability. The BOK has cut its policy rate by a cumulative 100 basis points since October last year in a pivot toward supporting growth, but the currency weakness means the central bank now © Korea Risk Group. All rights reserved. |





