The Bank of Korea(BOK) held its key interest rate steady at two-point-five percent as the Korean won continues to depreciate against the U.S. dollar.

The central bank announced the decision Thursday morning after the year’s first Monetary Policy Board meeting.

The decision is widely seen as reflecting concerns that a rate cut, as the won–dollar exchange rate approaches one-thousand-500, could further weaken the currency and fuel volatility.

The decision marks the fifth consecutive freeze at two-point-five percent, following meetings in July, August, October and November of last year. The bank cut rates by zero-point-25 percentage points in February and May in 2025.

The Korean won briefly strengthened to the one-thousand-440-won range late last December after authorities intervened verbally, but the won-dollar rate has rebounded in the new year, rising for ten straight sessions and nearing one-thousand-500, amid increased overseas stock purchases by retail investors and continued foreign selling of local equities.