BOK holds at 2.50% and unveils Fed-style dot plot as policy pause deepens.
Summary:
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Bank of Korea held its benchmark rate at 2.50%, as expected.
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Decision unanimous among seven-member board.
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2026 GDP forecast at 2.0%; 2027 growth seen at 1.8%.
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2025 inflation forecast at 2.2%; 2027 inflation at 2.0%.
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BOK introduces quarterly “dot plot”-style forward guidance.
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Move mirrors U.S. Federal Reserve communication framework.
The Bank of Korea kept its benchmark interest rate unchanged at 2.50% on Thursday, as widely expected, opting for policy stability amid resilient growth in the semiconductor sector and contained inflation pressures.
All 34 economists surveyed by Reuters had forecast a hold, and the central bank’s seven-member monetary policy board delivered a unanimous decision. Policymakers signalled that steady inflation and a chip-driven export recovery give them room to monitor financial stability risks, particularly currency volatility and asset prices — before considering further moves.
Updated forecasts show the BOK expects 2026 GDP growth at 2.0% and 2027 growth at 1.8%, pointing to a moderate but steady expansion. Inflation is projected at 2.2% in 2025 before easing to 2.0% in 2027, broadly consistent with the bank’s medium-term target.
Governor Rhee Chang-yong will hold a press conference at 0210 GMT/2130 US Eastern time, with markets closely watching for commentary on exchange-rate risks and housing market dynamics.
In a significant shift to communications strategy, the BOK is formally expanding its forward guidance framework. Beginning this meeting, it will publish a quarterly interest-rate projection chart, similar to the Federal Reserve’s “dot plot”, revealing anonymous views from all seven board members.
Under the new system, each policymaker will provide three projected interest-rate paths over the next six months, resulting in 21 dots per release. The chart will be issued alongside quarterly economic forecasts in February, May, August and November, and will also disclose dissenting votes immediately.
The move enhances transparency and aligns the BOK more closely with global central bank communication standards, while reinforcing the current message: policy is on hold, but not on autopilot.
AI image
Dots cross the Pacific.
