{"id":2207982,"date":"2025-01-17T08:00:13","date_gmt":"2025-01-16T23:00:13","guid":{"rendered":"https:\/\/koreapro.org\/?p=2207982"},"modified":"2025-01-16T12:56:25","modified_gmt":"2025-01-16T03:56:25","slug":"south-koreas-central-bank-freezes-key-rate-as-won-faces-growing-volatility","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2025\/01\/south-koreas-central-bank-freezes-key-rate-as-won-faces-growing-volatility\/","title":{"rendered":"South Korea\u2019s central bank freezes key rate as won faces growing volatility"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The Bank of Korea (BOK) <\/span><a href=\"https:\/\/www.bok.or.kr\/portal\/bbs\/P0000559\/view.do?nttId=10089267&amp;searchCnd=1&amp;searchKwd=&amp;depth2=200038&amp;depth3=201263&amp;depth=201263&amp;pageUnit=10&amp;pageIndex=1&amp;programType=newsData&amp;menuNo=200690&amp;oldMenuNo=201263\"><span style=\"font-weight: 400;\">kept its benchmark interest rate<\/span><\/a><span style=\"font-weight: 400;\"> at 3% during its monetary policy meeting on Thursday, maintaining a cautious stance amid heightened exchange rate volatility and weak domestic growth. The decision follows <\/span><a href=\"https:\/\/koreapro.org\/2024\/11\/economic-slowdown-drives-bank-of-korea-to-surprise-second-rate-cut\/\"><span style=\"font-weight: 400;\">two consecutive rate cuts<\/span><\/a><span style=\"font-weight: 400;\"> in late 2024, the first back-to-back reductions since the global financial crisis.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The BOK cited persistent risks to financial stability, including the South Korean won\u2019s depreciation, which recently pushed the KRW\/USD exchange rate to the upper 1,400s. With political uncertainty and global market shifts compounding economic pressures, the central bank opted to pause further monetary easing to monitor developments.<\/span><\/p>\n<p><b>WHY IT MATTERS<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The BOK\u2019s decision highlights concerns over the South Korean won\u2019s volatility. With the currency nearing 1,500 won per dollar, additional rate cuts could exacerbate depreciation, driving up import costs and fueling inflation. Governor Rhee Chang-yong appears focused on stabilizing the exchange rate to prevent resurging price pressures and bolster investor confidence.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The decision also reflects the limitations of monetary policy in addressing South Korea\u2019s slowing growth. With 2025 growth forecasts below 2%, the central bank may be signaling the need for greater fiscal support. The finance ministry will likely announce additional stimulus measures in the coming weeks to stimulate demand and support key sectors.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>The Bank of Korea (BOK) kept its benchmark interest rate at 3% during its monetary policy meeting on Thursday, maintaining a cautious stance amid heightened exchange rate volatility and weak domestic growth. The decision follows two consecutive rate cuts in late 2024, the first back-to-back reductions since the global financial crisis. The BOK cited persistent [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2207984,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24],"class_list":["post-2207982","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>South Korea\u2019s central bank freezes key rate as won faces growing volatility - Korea Pro<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2025\/01\/south-koreas-central-bank-freezes-key-rate-as-won-faces-growing-volatility\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Korea\u2019s central bank freezes key rate as won faces growing volatility - Korea Pro\" \/>\n<meta property=\"og:description\" content=\"The Bank of Korea (BOK) kept its benchmark interest rate at 3% during its monetary policy meeting on Thursday, maintaining a cautious stance amid heightened exchange rate volatility and weak domestic growth. 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