The Bank of Korea (BOK) is now openly leaning toward a cut, with four of six board members backing easing in the next three months. The headline? The pivot has begun. But regulators are moving in the opposite direction on credit. Household debt is rising again, SME lending mandates are being enforced with fines and financial buffers are still being built. The question is no longer if a rate cut is coming but whether financial conditions will let it land. Monetary Policy: Pivot Confirmed, Not Yet DeployedThe BOK held the base rate at 2.5% on 23rd October but the internal split has sharpened. Four of six voting members now support a cut within Q1 2026. Governor Rhee didn’t deny it. Instead, he warned of the risk pointing out that previous cuts fuelled property speculation, not recovery. The message? Easing is coming - but not recklessly. Flash back to October where we told you the internal split was growing. Growth and Forecasts: Stronger, But SelectiveQ3 GDP came in at 1.2% quarter on q...
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