At its 11 October monetary policy meeting, the Bank of Korea (BoK) cut the Base Rate by 25 basis points, from 3.00% to 2.75%. The decision was in line with market expectations and marked the second cut this year. The move aims at buttressing economic activity, amid slowing domestic demand and slumping exports, as Europe slides further into recession and the U.S. shows signs of weakening. In the accompanying statement, the BoK referred to the deepening of the Euro area crisis, in addition to a weak recovery in the United States. Against this backdrop, the Bank reiterated that "the negative output gap in the domestic economy will be sustained for a considerable time going forward, due mostly to the prolongation of the euro area fiscal crisis and to the sluggishness of the global economy". In addition, the Bank expects inflation to remain below the 3.0% target for the time being amid easing demand side pressures.
Korea Monetary Policy
Central Bank trims rate to prop up the economy
October 11, 2012
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Korea Monetary Policy Chart
Note: BoK Base Rate in %.
Source: Bank of Korea (BoK).
Korea Economic News
October 13, 2016
At its 13 October monetary policy meeting, the Bank of Korea (BoK) announced that it will hold the base rate constant at a record low of 1.25%, which was largely in line with market expectations.
October 5, 2016
In September, consumer prices rose 0.6% over the previous month, which contrasted the 0.1% decrease in August and overshot the 0.2% increase the markets had expected.
October 3, 2016
Korea’s Customs Services reported that exports totaled USD 40.9 billion in September, which represented a 5.9% contraction over the USD 43.4 billion recorded in the same month last year.
September 30, 2016
The forward-looking business confidence indicator (BSI) for the manufacturing sector produced by the Bank of Korea (BoK) rose from 74 points in September to 75 points in October.
September 30, 2016
In August, industrial production accelerated and expanded 2.3% year-on-year, which was up from both the 1.6% increase registered in July and the 1.6% rise the markets had expected.