BOK cuts interest rate to 2.5% as economic growth slows
https://www.cnbc.com/2025/05/29/south-korea-central-bank-cuts-interest-rates-.html
- Fourth cut in it's easing cycle in seven months
- 25bp cut, setting central bank rate at 2.50% as expected by the market.
- Slashes GDP growth forecast to 0.8%(previously 1.5%) , signalling more rate cuts ahead. 0.8% reflects only one supplementary administration budget ahead
- 25% reciprocal tariifs and political uncertainty. In its revised outlook released the same day, the BOK cited both external and domestic factors for the downgrade, including U.S. tariff shocks and continued weakness in domestic demand.
- Korea’s annual growth has dipped below 1 percent only three times since democratization: during the 1998 Asian financial crisis, when the economy shrank by 4.9 percent, the 2009 global financial crisis, when growth came in at 0.8 percent and the Covid-19 pandemic in 2020, when GDP contracted by 0.7 percent.
- Earlier this month, the Korea Development Institute also halved its 2025 growth projection to 0.8 percent from 1.6 percent. With both institutions now forecasting sub-1 percent growth, fears of prolonged low growth are likely to intensify.
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USD/KRW exchange rate: 1,377.11
USD/JPY exchange rate: 145.75엔
USD/CNY exchange rate: 7.1983위안
CNY/KRW exchange rate: 191.31원
DXY: 100.16
US Treasury 30Y yield: 5.020%
US Treasury 10Y yield:4.535%
US Treasury 2Y yield: 4.029%
KTB 30Y yield: 2.604%
KTB 10Y yield: 2.749%
KTB 3Y yield: 2.338%
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