Bank of Korea Maintains Status Quo For Fourth Consecutive Meeting

The seven-member monetary policy board of the Bank of Korea (BOK) voted to maintain the base rate (KROCRT=ECI) at 3.50 percent, as it did in February, April, and May.

As the decision was in accordance with the unanimous forecasts of 46 economists surveyed by Reuters, domestic markets displayed a muted response.

Since its last interest rate increase in January, the BOK has kept monetary policy unchanged, and its tightening campaign, which began in August 2021, is widely anticipated to be complete.

Since July 2022, when it reached a 24-year high of 6.3%, annual consumer inflation in South Korea has decreased. In June of this year, the rate was 2.7%, which is higher than the central bank's medium-term target of 2%.

The decision was made in response to heightened concerns regarding the lethargic property market, which has impacted the liquidity conditions of financial institutions.

South Korea's heavily trade-dependent economy has been losing momentum this year due to a slowing global economy, a feeble chip sector, and still sluggish demand from China, despite the fact that consumer sentiment reached its highest level in a year in June.