Overview

• The Bank of Korea kept its benchmark rate at 2.5 percent following a 25 basis-point cut in May, halting its easing cycle
• Rapid home price gains in Seoul and a 6.2 trillion won surge in June household loans raised financial stability concerns for policymakers
• U.S. tariff threats and a two-percentage-point gap with Federal Reserve rates heightened worries over capital outflows and currency volatility
• New government mortgage caps in the Greater Seoul area and tighter debt measures will be monitored by the central bank to assess their stabilizing effect
• The central bank said further rate cuts will depend on the outcomes of domestic macroprudential policies and evolving global trade and monetary conditions