The Bank of Korea maintains interest rates unchanged, concerns about the weak Korean won and rising real estate market.

The Bank of Korea maintains the benchmark interest rate unchanged, a move that is in line with market expectations. Authorities are closely monitoring the depreciation of the Korean won and the risk of financial imbalance that may arise from the continuous rise in the real estate market. The Bank of Korea on Thursday kept the seven-day repurchase rate unchanged at 2.5% for the fifth consecutive meeting. This decision was as expected. This action continues the policy of pausing action that began in July, when the central bank lowered interest rates four times since October 2024. Despite the slightly uncertain global trade outlook due to trade protectionism policies, the Korean economy is showing resilience. In November of last year, the Bank of Korea raised its 2026 economic growth forecast to 1.8%, citing strong exports and gradual recovery in private consumption, while also raising the inflation forecast to 2.1%. Although policymakers have been focused on supporting the economy, they are now placing greater emphasis on preventing financial market instability related to the real estate market and currency depreciation.