The Bank of Korea (BOK) is inching closer to its first rate cut, but it’s being held back by sticky inflation, currency pressure and a still-hot credit environment. The signal has shifted. Easing is no longer a question of “if”, but “how fast” and “under what guardrails”. While the Monetary Policy Board remains split, the broader system is prepping for a pivot - not a flood. Monetary Policy The BOK left its policy rate unchanged at 2.50% at the 27th November monetary policy meeting - the last decision before this report. That was widely expected. But the reasons are now more revealing than the result. Governor Rhee warned that premature cuts could reheat property markets or add fuel to household borrowing. The BOK flagged “external volatility and price risks” as key constraints. Read this as being code for: “we’re close, but not yet.” Look back to November 2025 where we flagged pivot bias and resistance to froth. Inflation & Price Risks The primary brake on the BOK's easing plans i...
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