#Bank of Korea

The Bank of Korea (BOK) has outlined its 2026 monetary policy, stating that any further interest rate cuts will depend on a careful assessment of inflation, growth, and financial stability.

Major investment banks have lifted South Korea's 2026 inflation forecast to 2.0%, citing the persistently weak won. With the currency nearing 1,500 per dollar, import costs are rising, posing a dilemma for the Bank of Korea.

The Bank of Korea cut its benchmark interest rate by 25 basis points to 3.25%, the first reduction in over three years, as it shifts its focus from inflation to supporting economic growth.

South Korea's self-employed over 60 now hold $263 billion in loans, largely tied to real estate. A Bank of Korea report warns this poses a growing risk to financial stability and non-bank lenders.