The Bank of Korea kept its base rate unchanged at 1.75 percent on April 18th 2019, as widely expected. Policymakers reiterated domestic economy will continue to grow at a rate that does not diverge significantly from its potential level and inflationary pressures on the demand side will not be high. That said, amid rising global headwinds and softening exports, the Bank of Korea lowered its economic growth forecast for 2019 to 2.5 percent from an earlier estimate of 2.6 percent made in January. The latest GDP growth outlook is now lower than both Finance Ministry's growth target of 2.6- 2.7 percent and the International Monetary Fund/IMF's forecast of 2.6 percent for 2019. Policymakers also revised down inflation target to 1.1 percent from an earlier of 1.4 percent. Interest Rate in South Korea averaged 3.17 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 1.75 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 1.75 in 12 months time. In the long-term, the South Korea Interest Rate is projected to trend around 2.00 percent in 2020, according to our econometric models.

South Korea Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2018-11-30 01:00 AM Interest Rate Decision 1.75% 1.5% 1.75% 1.75%
2019-01-24 01:00 AM Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-02-28 01:00 AM Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
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%
2019-07-18 01:00 AM Interest Rate Decision 1.75%
2019-08-30 01:00 AM Interest Rate Decision 1.75%



South Korea Holds Rates, Lowers Outlook Forecasts

The Bank of Korea kept its base rate unchanged at 1.75 percent on April 18th 2019, as widely expected. Policymakers reiterated domestic economy will continue to grow at a rate that does not diverge significantly from its potential level and inflationary pressures on the demand side will not be high. That said, amid rising global headwinds and softening exports, the Bank of Korea lowered its economic growth forecast for 2019 to 2.5 percent from an earlier estimate of 2.6 percent made in January.

The latest GDP growth outlook is now lower than both the Finance Ministry's growth target of 2.6- 2.7 percent and the International Monetary Fund/IMF's forecast of 2.6 percent for 2019. Policymakers also revised down inflation target to 1.1 percent from an earlier of 1.4 percent.

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 the uncertainties concerning Brexit.

The board judges that the pace of domestic economic growth has moderated somewhat as consumption growth has temporarily slowed, facilities and construction investment have continued undergoing adjustments and export growth has continued to slow. The sluggishness in employment conditions has partially lessened, with the increase in the number of persons employed having risen. Going forward the Board expects that consumption will continue to grow, while exports and facilities investment will also recover gradually toward the second half of this year, although the adjustment in construction investment will continue. GDP is forecast to grow at the mid-2 percent level this year, slightly below the level projected in January (2.6 percent).

Consumer price inflation has slowed to the mid-0 percent range, in consequence mainly of 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 level, and the rate of inflation expected by the general public has been in the low- to mid-2 percent range. Looking ahead, it is forecast that consumer price inflation will fluctuate for some time below 1 percent, lower than the path projected in January, and then run at the low- to mid-1 percent level from the second half of this year. Core inflation will also gradually rise.

The volatility of price variables in the domestic financial markets has expanded slightly. Long-term market interest rates and stock prices have rebounded after having fallen, affected by movements in the global financial markets in line with projections of weakening growth in major countries and expectations of progress in the US-China trade negotiations. The Korean won-US dollar exchange rate has risen, in line with the strengthening of the US dollar. The rate of increase in household lending has continued to slow, while housing prices have continued their downtrend.

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 the domestic economy will continue to grow at a rate that does not diverge significantly from its potential level and it is forecast that inflationary pressures on the demand side will not be high, the Board will maintain its accommodative monetary policy stance. In this process it will carefully monitor developments such as conditions related to trade with major countries, any changes in the economies and monetary policies of major countries, financial and economic conditions in emerging market economies, the trend of increase in household debt, and geopolitical risks, while examining their effects on domestic growth and inflation.



Bank of Korea l Rida Husna | rida@tradingeconomics.com
4/18/2019 9:22:24 AM



South Korea Money Last Previous Highest Lowest Unit
Interest Rate 1.75 1.75 5.25 1.25 percent [+]
Money Supply M0 106446800.00 106363000.00 107603500.00 11200.00 KRW Million [+]
Money Supply M1 866253.20 856014.00 866253.20 260.40 KRW Billion [+]
Interbank Rate 1.80 1.80 6.14 1.27 percent [+]
Money Supply M2 2757251.00 2737568.20 2757251.00 590.60 KRW Billion [+]
Money Supply M3 3918276.30 3857564.80 3918276.30 57007.90 KRW Billion [+]
Foreign Exchange Reserves 404030.00 405250.00 405510.00 564.50 USD Million [+]
Loans to Private Sector 8372062.00 8360706.00 8372062.00 2603700.00 KRW Hundred Million [+]
Deposit Interest Rate 2.07 2.15 19.50 1.37 percent [+]
Private Debt To GDP 253.30 254.90 254.90 237.30 percent [+]
Central Bank Balance Sheet 501158.80 493815.20 510090.10 310.30 KRW Billion [+]
Foreign Stock Investment 668173.70 742733.30 742733.30 349.48 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 May of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
1.75 1.75 5.25 1.25 1999 - 2019 percent Daily




Country Last Previous
Argentina 71.48 May/19
Turkey 24.00 Apr/19
Mexico 8.25 May/19
Russia 7.75 Apr/19
South Africa 6.75 Apr/19
Brazil 6.50 May/19
India 6.00 Apr/19
Indonesia 6.00 May/19
China 4.35 Apr/19
Saudi Arabia 3.00 Apr/19
United States 2.50 May/19
Singapore 2.24 Mar/19
Canada 1.75 Apr/19
South Korea 1.75 Apr/19
Australia 1.50 May/19
United Kingdom 0.75 May/19
Euro Area 0.00 Apr/19
France 0.00 Apr/19
Germany 0.00 Apr/19
Italy 0.00 Apr/19
Netherlands 0.00 Apr/19
Spain 0.00 Apr/19
Japan -0.10 Apr/19
Switzerland -0.75 Apr/19


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