South Korea Interest Rate

The Bank of Korea upheld its base rate at 3.5% during the April meeting, as widely expected. It marked the tenth consecutive meeting of unchanged borrowing costs, with the central bank emphasizing the need for further progress on price stability before considering monetary easing. Inflation stood at 3.1% in March, primarily due to increases in agricultural and global oil prices, while the core inflation moderated to 2.4% from 2.6% in February. Meantime, the GDP growth forecast for 2024 suggested consistency or potential improvement compared to the February estimate of 2.1%, primarily driven by exports. The committee reaffirmed its commitment to a restrained monetary policy stance for the foreseeable future, contingent upon the establishment of confidence in economic conditions, through assessing factors such as inflation trends, risks to financial stability and economic growth, and household debt growth.