The Bank of Korea held the 7-day base rate steady at 1.50 percent during its August meeting, following a 25 bps cut last month. Policymakers noted that the pace of domestic economic growth has remained slow while uncertainties concerning the growth path forecast have further increased, due mainly to the escalation of the US-China trade dispute and the heightened geopolitical risks. Meanwhile, inflationary pressures on the demand side are expected to remain subdued. The bank said it will judge whether to adjust the degree of monetary policy accommodation in the near term, while closely examining any changes in macroeconomic and financial stability conditions. Interest Rate in South Korea averaged 3.14 percent from 1999 until 2019, reaching an all time high of 5.25 percent in October of 2000 and a record low of 1.25 percent in June of 2016.

Interest Rate in South Korea is expected to be 1.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in South Korea to stand at 1.25 in 12 months time. In the long-term, the South Korea Interest Rate is projected to trend around 1.25 percent in 2020, according to our econometric models.

South Korea Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-04-18 01:00 AM Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-05-31 01:00 AM Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-07-18 01:00 AM Interest Rate Decision 1.5% 1.75% 1.75% 1.75%
2019-08-30 01:00 AM Interest Rate Decision 1.5% 1.5% 1.5% 1.50%
2019-10-16 01:00 AM Interest Rate Decision 1.5% 1.25%
2019-11-29 01:00 AM Interest Rate Decision 1.25%
2020-01-17 01:00 AM Interest Rate Decision



Bank of Korea Leaves Monetary Policy Unchanged

The Bank of Korea held the 7-day base rate steady at 1.50 percent during its August meeting, following a 25 bps cut last month. Policymakers noted that the pace of domestic economic growth has remained slow while uncertainties concerning the growth path forecast have further increased, due mainly to the escalation of the US-China trade dispute and the heightened geopolitical risks. Meanwhile, inflationary pressures on the demand side are expected to remain subdued. The bank said it will judge whether to adjust the degree of monetary policy accommodation in the near term, while closely examining any changes in macroeconomic and financial stability conditions.

Excerpts from the statement by the Bank of Korea:

The board sees global economic growth and the global financial markets as likely to be affected by factors such as the degree of the spread of trade protectionism, the changes in the monetary policies of major countries, and geopolitical risks.

The board judges that the pace of domestic economic growth has remained slow, as consumption growth has weakened, while the adjustment in construction investment and the sluggishness in exports and facilities investment have continued. Employment conditions have partially improved, with the increase in the number of persons employed having risen. With respect to future domestic economic growth, the Board judges that the uncertainties concerning the growth path forecast have further increased, owing chiefly to the escalation of the US-China trade dispute and the heightened geopolitical risks.

Consumer price inflation has slowed to the mid-0 percent range, in consequence mainly of the declines in the prices of petroleum products and agricultural, livestock and fisheries products. Core inflation (with food and energy product prices excluded from the CPI) has been at the upper-0 percent range, and the rate of inflation expected by the general public has been at the 2 percent level. Looking ahead, it is forecast that consumer price inflation will fluctuate for some time at the lower-0 percent level as downside risks to the path projected in July have increased, and then run at the low- to mid-1 percent level from next year. Core inflation will also gradually rise.

The high volatility of price variables in the domestic financial markets has continued, in line mainly with concerns about the US-China trade dispute, geopolitical risks, and the consequent economic slowdowns at home and abroad. Long-term market interest rates and stock prices have fallen significantly, while the Korean won-US dollar exchange rate has risen considerably. The slowdown in household lending growth has weakened somewhat, while housing prices have continued their downtrend but have risen in some parts of Seoul and its surrounding areas.

Looking ahead, the board will conduct monetary policy so as to ensure that the recovery of economic growth continues and consumer price inflation can be stabilized at the target level over a medium-term horizon, while paying attention to financial stability. As it is expected that domestic economic growth will be moderate and it is forecast that inflationary pressures on the demand side will remain at a low level, the board will maintain its accommodative monetary policy stance. In this process it will judge whether to adjust the degree of monetary policy accommodation, while closely examining any changes in macroeconomic and financial stability conditions. It will also carefully monitor the US-China trade dispute, any changes in the economies and monetary policies of major countries, the trend of increase in household debt, and geopolitical risks.


Bank of Korea | Rida Husna | rida@tradingeconomics.com
8/30/2019 9:58:31 AM



South Korea Money Last Previous Highest Lowest Unit
Interest Rate 1.50 1.50 5.25 1.25 percent [+]
Interbank Rate 1.49 1.49 6.14 1.27 percent [+]
Money Supply M0 107524100.00 107331000.00 107603500.00 11200.00 KRW Million [+]
Money Supply M1 870797.50 874961.40 876452.00 260.40 KRW Billion [+]
Money Supply M2 2790153.00 2778412.60 2790153.00 590.60 KRW Billion [+]
Money Supply M3 3977217.70 3964064.20 3977217.70 57007.90 KRW Billion [+]
Foreign Exchange Reserves 401483.50 403112.50 405513.20 564.50 USD Million [+]
Loans to Private Sector 8568427.00 8533258.00 8568427.00 2603700.00 KRW Hundred Million [+]
Deposit Interest Rate 1.90 1.97 19.50 1.37 percent [+]
Private Debt To GDP 260.80 253.30 260.80 237.30 percent [+]
Lending Rate 2.50 2.50 2.50 2.50 percent [+]
Central Bank Balance Sheet 503939.20 491716.00 510090.10 310.30 KRW Billion [+]
Foreign Stock Investment 708835.90 697567.10 776917.60 34948.20 USD Hundreds of Millions [+]


South Korea Interest Rate

In South Korea the interest rates decisions are taken by the Bank of Korea’s (BOK) Monetary Policy Committee. The official interest rate is the Bank of Korea Base Rate which was changed from overnight call rate on March 2008. This page provides - South Korea Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. South Korea Interest Rate - actual data, historical chart and calendar of releases - was last updated on September of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
1.50 1.50 5.25 1.25 1999 - 2019 percent Daily




Country Last Previous
Argentina 84.15 Sep/19
Turkey 16.50 Sep/19
Mexico 8.00 Aug/19
Russia 7.00 Sep/19
South Africa 6.50 Aug/19
Brazil 6.00 Aug/19
Indonesia 5.50 Aug/19
India 5.40 Aug/19
China 4.25 Sep/19
Saudi Arabia 2.75 Aug/19
United States 2.25 Aug/19
Canada 1.75 Sep/19
Singapore 1.74 Aug/19
South Korea 1.50 Aug/19
Australia 1.00 Sep/19
United Kingdom 0.75 Aug/19
Euro Area 0.00 Sep/19
France 0.00 Sep/19
Germany 0.00 Sep/19
Italy 0.00 Sep/19
Netherlands 0.00 Sep/19
Spain 0.00 Sep/19
Japan -0.10 Aug/19
Switzerland -0.75 Aug/19


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