Anchor: The Bank of Korea has decided to hold its key interest rate steady at two-point-five percent. It explained that although the South Korean economy is showing some signs of improvement, housing prices remain high, especially in the Seoul metropolitan area, while external concerns including U.S. President Donald Trump’s tariff war persist. Meanwhile, it slightly nudged up its growth forecast.
Rosyn Park has this report.

Reporter: South Korea’s central bank kept its benchmark interest rate unchanged at two-point-five percent, citing lingering uncertainties both at home and abroad.

The Bank of Korea(BOK) said Thursday that it will maintain its monetary easing stance to reduce downside risks, adding that future adjustments will depend on changes in domestic and international policies, as well as the trends in prices and financial markets. 

BOK Gov. Rhee Chang-yong told reporters after the Monetary Policy Board meeting that the central bank will likely maintain an easing stance through the first half of next year amid a continued lag in growth.

Still, the bank revised up its economic growth outlook for the country this year by zero-point-one percentage point to zero-point-nine percent.

While noting that signs of modest improvement are emerging, led by domestic demand, the BOK predicted that U.S. tariffs will lower the rate of gross domestic product growth by zero-point-45 percentage point this year and zero-point-six percentage point in 2026.

The central bank forecast a slowdown in exports, most notably steel, automobiles and machinery, due to reduced shipments to the U.S.

The central bank also pointed to uncertainties surrounding trade negotiations between the U.S. and China, and Trump’s item-specific tariffs on semiconductors and pharmaceuticals.

Rhee also noted signs of slowing home price growth and weaker loan expansion but warned that household debt remains a serious concern, particularly in Seoul’s housing market.

With a one-point-six percent growth forecast for next year, Rhee said the BOK’s monetary policy stance may change depending on a review in November.
Rosyn Park, KBS World Radio News.