Bank of Korea Governor Lee Chang-yong said during a press meeting held right after the Monetary Policy Committee on the 17th that "Commissioner Shin Seong-hwan expressed the opinion that it would be advisable to lower the benchmark interest rate."
Governor Lee added, "Commissioner Shin noted that while a significant rate cut is needed considering inflation, there are concerns such as exchange rates and household debt, so it would be appropriate to respond to economic slowdown by lowering the interest rate by 25 basis points (1 basis point = 0.01 percentage points)."
On that day, the Monetary Policy Committee decided to keep the benchmark interest rate unchanged at 2.75% annually. This momentarily paused the rate cuts that had resumed when the rate was lowered by 0.25 percentage points in February. The Bank of Korea had previously lowered the benchmark rate by 0.25 percentage points in its meetings in October and November last year and in February this year.
Regarding the background of the interest rate freeze, Governor Lee stated, "The biggest change since the monetary policy direction meeting in February has been the deterioration of external conditions," and added, "As the intensity of U.S. tariff policy and responses from major countries can change rapidly in the short term, it is currently difficult to set a basic forecast scenario."
He continued, "Continued net selling of domestic stocks by foreigners has raised concerns in the market about currency supply and demand pressures and increased volatility of the yuan. Considering the uncertain conditions, it was deemed appropriate to maintain the current interest rate level while continuing the rate cut trend, observing how the uncertainties in domestic and foreign policy conditions will change this time."