Financial News: Bank Of Korea Keeps Rates Steady

Bank Of Korea Keeps Rates Steady

07/10/2025 - 02:30:00 (RTTNews)

(RTTNews) - The Bank of Korea maintained its interest rate on Thursday as rising house prices and household debt pose risks to the financial stability amid escalating trade tensions weighing on economic growth outlook.

The Monetary Policy Board decided to leave the Base Rate unchanged at 2.50 percent.

The bank had previously reduced the benchmark rate by a quarter-point each in May and February.

"The Board will maintain its rate cut stance to mitigate downside risks to economic growth and adjust the timing and pace of any further Base Rate cuts while closely monitoring changes in the domestic and external policy environments and examining the resulting impact on inflation and financial stability," the bank said in a statement.

The board observed that the future path of economic growth faces significant uncertainties concerning trade negotiations with the US.

The board also noted that risks associated with the housing market in Seoul and its surrounding areas and household debt increased. It has become necessary to assess the effect of the macroprudential policies while remaining cautious about the possibility of heightened volatility in the foreign exchange market, the bank said.

The exact timing of the central bank action will depend on the developments in housing market and trade negotiations, ING economist Min Joo Kang said.

The economist added that the pause on rate cuts is likely to continue through the third quarter.

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