The Bank of Korea keeps rates unchanged, emphasizing its balanced position

Bank of Korea Maintains Neutral Policy Stance

The Bank of Korea opted to keep its policy rate unchanged today, signaling a neutral approach by ruling out further monetary easing and providing no indication of an upcoming rate increase. For the first time, the central bank introduced a six-month dot plot projection, mirroring the Federal Reserve’s method. This forecast places the median policy rate at 2.5%. While the dot plot reveals that four members anticipate a rate cut to 2.25%, the overall bias toward easing remains moderate. Additionally, the three-month outlook showed that none of the policymakers supported a rate hike.

In its latest projections, the Bank of Korea raised its 2026 GDP growth estimate from 1.8% to 2.0% year-on-year, and adjusted its inflation forecast upward from 2.1% to 2.2%.