BOK prioritizes won's volatility over economy in rate decision
The Bank of Korea (BOK) held its key interest rate steady at 3 percent, Thursday, despite a stagnant economy, citing the recent sharp weakening and elevated volatility of the Korean currency as a key factor in delaying a much-anticipated monetary easing. The BOK evaluated that the Korean economy is experiencing an extended, steeper-than-expected downturn, as reflected in the sharp decline of broader economic sentiment indices since President Yoon Suk-yeol's controversial martial law declaration on Dec. 3, 2024. However, BOK Governor Rhee Chang-yong said a pause in policy is necessary to fully assess the impact of consecutive monetary easing measures implemented in October and November. Rhee said the detention of the president on Wednesday for questioning by investigators will help Korea avoid a feared downgrade in its creditworthiness. However, the country will remain under close scrutiny from offshore investors, who will be watching whether the economic dynamics are functioning independently of political uncertainties, a point Rhee has consistently emphasized. Shin Sung-hwan, a well-kn
Jan 16, 2025By Lee Kyung-min
