Post by : Badri Ariffin

Seoul — South Korea’s central bank opted to keep its benchmark interest rate unchanged at 2.5 percent Thursday, aiming to balance financial stability with a red-hot housing market and a weakening currency.

The Bank of Korea’s (BOK) Monetary Policy Board made the widely anticipated decision during its meeting in Seoul, marking the third consecutive hold since the easing cycle began last October. Over the past year, the central bank has lowered rates by 100 basis points, with the latest cut coming in May.

The move comes amid concerns that further rate reductions could overheat the property sector, where housing prices continue to surge. Meanwhile, the Korean won has experienced volatility, prompting policymakers to weigh the risks of currency depreciation against the benefits of continued monetary support for the broader economy.

Globally, central banks are adopting varied approaches. In the U.S., the Federal Reserve recently cut its benchmark rate by a quarter point to a range of 4-4.25 percent and indicated two more potential cuts this year, reflecting similar efforts to stimulate growth while managing inflation.

Economists note that South Korea faces a delicate balancing act: supporting economic recovery without fueling asset bubbles or undermining currency stability. Investors and households alike are watching closely, as future policy moves will shape borrowing costs, mortgage rates, and the pace of domestic spending.

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