Bank of Korea to hold rates at 2.50% on January 15, next cut delayed to 2027: Reuters poll
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
BENGALURU, Jan 13 : South Korea’s central bank will keep its key interest rate unchanged at 2.50 per cent on Thursday, as the won's fall has limited room for easing, according to economists in a Reuters poll, who have pushed expectations for the next cut to early next year.
The Korean won has weakened nearly 2 per cent during the first two weeks of the year, increasing the risk of higher consumer prices and stoking inflation concerns, an issue flagged by the Bank of Korea (BOK) at its November meeting.
Asia’s fourth-largest economy recorded inflation of 2.1 per cent in 2025, slightly lower than 2.3 per cent in 2024 but still above the BOK’s 2 per cent target.
The central bank has also signalled it may be nearing the end of its current easing cycle, revising its guidance from “maintain its rate cut stance” to “the Board will decide whether and when to implement any further Base Rate cuts,” strengthening the case for a longer pause.
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
This service is not intended for persons residing in the E.U. By clicking subscribe, I agree to receive news updates and promotional material from Mediacorp and Mediacorp’s partners.
Loading
All 34 economists polled from January 6 to 12 forecast the BOK would keep its base rate unchanged at 2.50 per cent on January 15.
"Given the volatility in the FX market, it is too soon for the BOK to cut rates right now," said Kelvin Lam, senior economist at Pantheon Macroeconomics.
"Despite the government's efforts in controlling supply, expectations for house prices, particularly for Seoul apartment prices, are still elevated at the moment. So the focus for the BOK is now turned to having a stable currency and also looking at instability stemming from the overheating apartment prices."
Apartment prices in Seoul increased by 0.18 per cent in the week ending January 5, according to data released by the Korea Real Estate Board on Thursday. Prices climbed 8.7 per cent over the course of 2025, underscoring challenges for the BOK as it considers whether to resume easing.
The survey also showed no change to rates through 2026, marking a shift from the November 2025 poll, when more than 60 per cent of respondents expected at least one additional rate cut in the first quarter of this year.
In the latest poll, only 22 per cent, seven of 32 respondents, expected another cut this quarter.
South Korea’s economy was forecast to expand 2.0 per cent this year, slightly above the BOK’s forecast of 1.8 per cent, and by 1.9 per cent in both 2027 and 2028.
Inflation was expected to average 1.9 per cent this year, slightly below the central bank's forecast of 2.1 per cent.
(Other stories from the Reuters global economic poll)
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app