South Korea is still balancing on the edge. The Bank of Korea (BOK) has held rates at 2.50% again, but the board is quietly pivoting toward easing. Inflation is falling, household debt pressures persist and capital outflows are keeping policymakers on high alert. Behind the scenes, financial regulators are pushing ahead on digital innovation and debt containment, even as the real economy slows. The headlines are steady – but look closer, and the next steps are already being mapped out.
Monetary Policy
The rate hold at 2.50% surprised no one. But the split inside the BOK board is growing sharper: four of seven members now back a rate cut within the next quarter. That puts the balance clearly toward easing. [Flashback to August 2025 for prior hold and easing lean.]
Growth forecasts have been nudged slightly higher - now projected at 0.9% for 2025 - but this is largely cosmetic. Inflation is fading fast, reportedly dipping to 1.7% year on year in August, giving the BOK further cover to cu...
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