Overview
- The policy board kept rates on hold for a fifth meeting and removed language pointing to further cuts, with Governor Rhee citing exchange‑rate volatility and noting upside risks to growth from semiconductors.
- Rhee said a weaker won can lift inflation but is unlikely to trigger a financial crisis, stressed that authorities have ample dollars, and indicated temporary measures may be used alongside ongoing coordination with the National Pension Service.
- The won has traded around 1,470–1,480 per dollar, pressured by yen weakness, strong importer demand and a surge in residents’ overseas securities purchases after a brief rebound from December’s verbal intervention and NPS hedging.
- U.S. Treasury Secretary Scott Bessent said the won’s depreciation is not in line with Korea’s fundamentals and excess FX volatility is undesirable, and Seoul said the remarks underscore the need for stability tied to a $350 billion U.S. investment pledge that allows timing adjustments if markets are unstable.
- A BOK official reported net US$19.6 billion in foreign‑currency outflows in Jan–Oct 2025 and residents’ overseas securities investment of $117.1 billion, while banks saw roughly $480.8 million in retail cash dollar purchases since Dec. 24.