Bank of Korea keeps interest rates unchanged amid political turmoil
2025.01.15 20:44
Investing.com– South Korea’s central bank unexpectedly kept interest rates unchanged on Thursday amid heightened political uncertainty in the country after the recent arrest of impeached President Yung Suk Yeol.
The Bank of Korea left its at 3%, compared to expectations that it would cut the rate to 2.75%.
The central bank had cut interest rates twice in 2024, as it kicked off an easing cycle to help support economic growth. Consistently softer inflation in the country sparked expectations of more rate cuts.
But these expectations were dented by heightened political uncertainty in the country, after President Yoon attempted to unsuccessfully implement military law in December.
Yoon was impeached, and was arrested at the Presidential compound on Wednesday.
Investors had also expected more easing by the BOK to help offset the impact of increased political uncertainty, especially after South Korean stocks and the were battered over the past month. The won in particular slumped to its weakest level in 15 years.
