Interest Rate in Korea

Korea Interest Rate | Economic News & Forecasts

Korea - Interest Rate

BOK keeps rates at all-time low in October

At its meeting on 14 October, the Bank of Korea (BOK) kept the base rate at its record low of 0.50%, in line with market expectations.

The Bank’s decision to hold came amid weak activity and a deteriorating labor market. A resurgence of Covid-19 cases globally and the tightening of measures to contain the rise in infections are prompting uncertainty over a recovery in the short term, therefore the BOK decided to maintain its current accommodative policy stance in a bid to counter these setbacks. However, concerns over rising house prices and household debt likely discouraged the Bank from further easing.

Looking forward, the Bank confirmed in its statement that it will “maintain its accommodative monetary policy stance”, assuring it will watch economic developments closely amid the ongoing coronavirus outbreak. Most of our panelists see rates unchanged next year.

Commenting on the outlook, analysts at Nomura noted:

“We believe that monetary policy is likely to remain unchanged for some time for two reasons. First, there is less pressure on the BOK to support the economic recovery, following the announcements of stimulus packages. […] Second, monetary policy is constrained by the effective lower bound and we believe it will take some time for the BOK to design a new policy strategy.”

The next monetary policy meeting is set for 26 November.

FocusEconomics Consensus Forecast panelists see the base rate ending 2020 at 0.50% and 2021 at 0.54%.

Korea - Interest Rate Data

2015   2016   2017   2018   2019  
Policy Interest Rate (%)1.50  1.25  1.50  1.75  1.25  

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Korea Interest Rate Chart


Korea Interest Rate
Note: KoB Base Rate in %.
Source: Bank of Korea.

Korea Facts

Value Change Date
Bond Yield1.681.55 %Dec 31
Exchange Rate1,1560.21 %Dec 31

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