The Bank of Korea(BOK) says it will decide whether to further slash the key interest rate next year after considering foreign exchange rates and inflation trends.

The central bank announced its stance Thursday when it presented its monetary policy direction for 2026. 

The bank said it will take into account consumer prices, growth trends and changes in financial stability conditions when deciding whether and when to pursue further cut rates.

On economic growth, the BOK said it expects the nation to post growth rates similar to potential growth rates but was quick to add that this would depend on the global trade environment, the performance of the semiconductor industry, and how fast domestic demand recovers. 

The bank also forecast that the inflation rate will fluctuate around the two percent range in 2026 before adding that upward pressure could increase more than expected due to the higher exchange rate and a recovery in domestic demand. 

On the rising won-dollar exchange rate, the BOK said it will strengthen monitoring of the forex market and actively take measures to stabilize the market if faced with excessive concentration.