The Bank of Korea keeps the option of lowering interest rates in 2026 and warns that risks continue to exist.

The Bank of Korea said on Thursday that they will continue to open the door for further interest rate cuts next year, while also increasing vigilance against the risks to financial stability posed by the weakening Korean won and rising house prices. According to the 2026 monetary policy statement released by the Bank of Korea on Thursday, any decision regarding further easing of policy will depend on a comprehensive assessment of inflation, growth, and the dynamic risks to financial stability. The Bank of Korea pointed out that risks related to the continuous rise in housing prices in Seoul and surrounding areas persist, as well as household debt issues, warning that the accumulation of financial imbalances requires close attention. The Bank of Korea also mentioned the increased volatility in the foreign exchange market, stating that they will enhance monitoring and be prepared to implement market stability measures in the event of excessive fluctuations or herd behavior.