Latest bank decision: At its meeting on 15 May, the Central Bank decided to lower the target for the overnight...
BOK Base Rate in Korea
South Korea's central bank policy rate declined from 2014 to 2020 in order to stimulate growth and inflation. Post-pandemic, there was a gradual shift towards higher interest rates in order to tame above-target price pressures, before another easing cycle began in 2024.
The BOK Base Rate ended 2022 at 3.25%, above the 1.00% end-2021 value and also above the reading of 2.50% a decade earlier. For reference, the average policy rate in the Asia-Pacific region was 3.70% at the end of 2022. For more interest rate information, visit our dedicated page.
Korea Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for Korea from 2015 to 2024.
Source: Macrobond.
Korea Interest Rate Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| BOK Base Rate (%, eop) | 0.50 | 1.00 | 3.25 | 3.50 | 3.00 |
| 3-Month KORIBOR (%, eop) | 0.81 | 1.41 | 4.04 | 3.88 | 3.36 |
| 10-Year Bond Yield (%, eop) | 1.71 | 2.25 | 3.73 | 3.18 | 2.86 |
Central Bank leaves rates unchanged in April
Latest bank decision: At its meeting on 17 April, the Central Bank decided to leave the base rate unchanged at 2.75%.
Elevated uncertainty drives hold: The Bank judged that maintaining the current rate was appropriate given the high uncertainty in the economic outlook, driven by shifts in U.S. tariff policies and potential domestic fiscal stimulus after the June presidential election. The Bank’s hold was also influenced by volatile exchange rates and the desire to monitor the trend in household loans; high loan-taking had previously been flagged as a concern.
Monetary easing on the cards: The Central Bank stated that it was likely to cut rates going forward, but didn’t say when or by how much. Our panelists see between 25 and 75 basis points of cuts between now and end-2025.
Panelist insight: On the outlook, Goldman Sachs analysts said: “We continue to expect a 25bp cut in May and another 25bp cut in August for now, with risks to our views skewed to faster and more easing given residual risk of further tariff surprises. We think that the policy mix of fiscal and monetary policy for the remainder of 2025 will hinge on tariff negotiations with the US and the scope and timing of fiscal stimulus.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Korean interest rate projections for the next ten years from a panel of 19 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Korean interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Korean interest rate projections.
Want to get access to the full dataset of Korean interest rate forecasts? Send an email to info@focus-economics.com.
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