Overview

• The Bank of Korea maintained its benchmark interest rate at 2.75% on April 17, 2025, to stabilize the won and monitor economic risks.
• South Korea faces significant economic challenges, including U.S. reciprocal tariffs, sluggish domestic demand, and political uncertainty ahead of a June 3 snap presidential election.
• The Korean won, which recently fell to its weakest level since 2009 at 1,487.6 per dollar, has partially recovered to around 1,416 per dollar.
• Finance Minister Choi Sang-mok is negotiating with the U.S. to delay tariff implementation, while the government drafts a supplementary budget of 12 trillion won to support the economy.
• Analysts anticipate a potential 25 basis point rate cut in May, as the central bank assesses the ongoing impact of trade tensions and prepares for updated growth forecasts.