US EditionSouth Korea's Central Bank Cuts Borrowing Costs to Nurse the Sluggish Economy
- On May 29, 2025, South Korea’s central bank lowered its benchmark interest rate by 0.25 percentage points to 2.5% in an effort to stimulate the slowing domestic economy.
- The rate cut followed weak economic growth in the first quarter, caused by slower job creation, reduced consumption, and falling business investment amid ongoing political turmoil and U.S. Tariffs.
- The bank also sharply lowered its 2025 growth forecast to 0.8%, down from 1.5% announced in February, citing the effects of trade tensions, geopolitical uncertainty, and weak domestic demand.
- The official statement highlighted that economic activity within South Korea showed little improvement in April, and the announcement was met with a positive market reaction, as the Kospi index rose by 1.7%.
- The rate cut aims to ease economic pressures while South Korea manages political instability and U.S. Trade disputes, with expectations that borrowing costs may fall further to stimulate recovery.
19 Articles
19 Articles
S. Korea central bank cuts key rate, slashes 2025 growth forecast
SEOUL, South Korea — South Korea’s central bank cut interest rates Thursday in a bid to cushion the export-dependent economy from US President Donald Trump’s tariff war, as it almost halved its annual growth forecast. Decision-makers lowered the benchmark interest rate “from the current 2.75 percent to 2.5 percent” and predicted the economy would expand
South Korean consumer confidence up as optimism over new government kicks in, rate cuts expected
The boost in sentiment is being attributed to growing expectations that the incoming government, set to be formed after the June 3 election, will deliver economic support and policy stability.
Biz sentiment improves for 3rd consecutive month in May: BOK survey
Korea's business sentiment improved for the third straight month in May amid eased uncertainties at home and abroad, a central bank poll showed Wednesday. The Composite Business Sentiment Index (CBSI) for all industries came to 90.7 in May, up 2.8 points from the previous month, according to the survey by the Bank of Korea (BOK). It marked the first time since November that the index stayed above the long-term average of about 90. The CBSI among…
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