Seoul, South Korea - The Bank of Korea's Monetary Policy Committee kept its key interest rate at 3.50%, prioritizing assessing volatile global conditions over potentially premature policy easing.
Despite recent signs of slowing inflation, the Bank of Korea found it necessary to "assess changes in domestic and external conditions," including interest rate decisions by other major central banks and a volatile foreign exchange market.
The Bank reiterated its commitment to a restrictive policy stance.
Geopolitical risks, policy directions in major economies, and the depreciation of the Korean won complicate the Bank's near-term assessment.
The Bank expects inflation to rise slightly due to higher agricultural prices before gradually declining.
The Bank's outlook for the South Korean economy remains cautious.
Although it expects continued modest growth driven by exports, it also notes risks in the IT sector and a stressed real estate market due to the restructuring of project financing.
