The Bank of Korea left its base rate steady at 1.75 percent on February 28th 2019, as widely expected. While forecasting that consumer price inflation will fluctuate for some time below 1 percent, slightly lower than the path projected in January, and then run at the mid-1 percent level from the second half of this year; policymakers reiterated the domestic economy will sustain a rate of growth that does not diverge significantly from its potential level. Interest Rate in South Korea averaged 3.18 percent from 1999 until 2019, reaching an all time high of 5.25 percent in October of 2000 and a record low of 1.25 percent in June of 2016.

Interest Rate in South Korea is expected to be 1.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in South Korea to stand at 1.75 in 12 months time. In the long-term, the South Korea Interest Rate is projected to trend around 2.00 percent in 2020, according to our econometric models.

South Korea Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2018-10-18 01:00 AM Interest Rate Decision 1.5% 1.5% 1.5% 1.5%
2018-11-30 01:00 AM Interest Rate Decision 1.75% 1.5% 1.75% 1.75%
2019-01-24 01:00 AM Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-02-28 01:00 AM Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-04-18 01:00 AM Interest Rate Decision 1.75% 1.75%
2019-05-31 01:00 AM Interest Rate Decision 1.75%
2019-07-18 01:00 AM Interest Rate Decision 1.75%



South Korea Keeps Base Rate Unchanged at 1.75%

The Bank of Korea left its base rate steady at 1.75 percent on February 28th 2019, as widely expected. While forecasting that consumer price inflation will fluctuate for some time below 1 percent, slightly lower than the path projected in January, and then run at the mid-1 percent level from the second half of this year; policymakers reiterated the domestic economy will sustain a rate of growth that does not diverge significantly from its potential level.

Excerpts from the statement by The Bank of Korea:

The Board considers that the pace of global economic growth has continued to slow somewhat. Volatility in the global financial markets has continued the trend of decrease seen last month, as expectations of an adjustment to the Federal Reserve’s pace of monetary policy normalization and of progress in the US-China trade negotiations have heightened. Looking ahead, the Board sees global economic growth and the global financial markets as likely to be affected by factors such as the degree of the spread of trade protectionism, the paces of monetary policy normalization in major countries, and the uncertainties concerning Brexit.

The Board judges that the domestic economy has sustained a rate of growth not diverging significantly from its potential level, as consumption has continued to grow modestly, although the adjustments in facilities and construction investment have continued and export growth has slowed. Employment conditions have been sluggish, with the number of persons employed having increased only slightly. Going forward the Board expects domestic economic growth to be generally consistent with the path projected in January. Consumption will continue to grow, while exports and facilities investment will also recover gradually toward the second half of this year, although the adjustment in construction investment will continue.

Consumer price inflation has slowed to the upper-0% range, in consequence mainly of declines in the prices of petroleum products and reductions in the extents of increase in agricultural, livestock and fisheries product prices. Core inflation (with food and energy product prices excluded from the CPI) has been at the 1% level, and the rate of inflation expected by the general public has been in the low- to mid-2% range. Looking ahead, it is forecast that consumer price inflation will fluctuate for some time below 1%, slightly lower than the path projected in January, and then run at the mid-1% level from the second half of this year. Core inflation will also gradually rise.

The domestic financial markets have been stable. Stock prices have risen mainly on expectations of an easing of the US-China trade dispute. Long-term market interest rates and the Korean won-US dollar exchange rate have fluctuated within narrow ranges. The rate of increase in household lending has continued to slow, while housing prices have fallen slightly.

Looking ahead, the Board will conduct monetary policy so as to ensure that the recovery of economic growth continues and consumer price inflation can be stabilized at the target level over a medium-term horizon, while paying attention to financial stability. As it is forecast that inflationary pressures on the demand side will not be high for the time being, and that the domestic economy will sustain a rate of growth that does not diverge significantly from its potential level, the Board will maintain its accommodative monetary policy stance. In this process it will judge whether to adjust the degree of monetary policy accommodation further, while closely checking future economic growth and inflation trends. It will also carefully monitor conditions related to trade with major countries, any changes in the monetary policies of major countries, financial and economic conditions in emerging market economies, the trend of increase in household debt, and geopolitical risks.


Bank of Korea l Rida Husna | rida@tradingeconomics.com
2/28/2019 2:14:34 AM



South Korea Money Last Previous Highest Lowest Unit
Interest Rate 1.75 1.75 5.25 1.25 percent [+]
Money Supply M0 107603500.00 103994800.00 107603500.00 11200.00 KRW Million [+]
Money Supply M1 858377.80 852320.20 858377.80 260.40 KRW Billion [+]
Interbank Rate 1.88 1.87 6.14 1.27 percent [+]
Money Supply M2 2719444.70 2709508.40 2719444.70 590.60 KRW Billion [+]
Money Supply M3 3833208.80 3814691.90 3833208.80 57007.90 KRW Billion [+]
Foreign Exchange Reserves 404670.00 405510.00 405510.00 564.50 USD Million [+]
Loans to Private Sector 8360706.00 8317393.00 8360706.00 2603700.00 KRW Hundred Million [+]
Deposit Interest Rate 1.67 1.56 19.50 1.56 percent [+]
Private Debt To GDP 253.30 254.90 254.90 237.30 percent [+]
Central Bank Balance Sheet 490201.00 495304.60 510090.10 310.30 KRW Billion [+]
Foreign Stock Investment 668173.70 742733.30 742733.30 349.48 USD Hundreds of Millions [+]


South Korea Interest Rate

In South Korea the interest rates decisions are taken by the Bank of Korea’s (BOK) Monetary Policy Committee. The official interest rate is the Bank of Korea Base Rate which was changed from overnight call rate on March 2008. This page provides - South Korea Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. South Korea Interest Rate - actual data, historical chart and calendar of releases - was last updated on March of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
1.75 1.75 5.25 1.25 1999 - 2019 percent Daily




Country Last Previous
Argentina 63.87 Mar/19
Turkey 24.00 Mar/19
Mexico 8.25 Feb/19
Russia 7.75 Feb/19
South Africa 6.75 Feb/19
Brazil 6.50 Feb/19
India 6.25 Feb/19
Indonesia 6.00 Feb/19
China 4.35 Feb/19
Saudi Arabia 3.00 Feb/19
United States 2.50 Mar/19
Canada 1.75 Mar/19
South Korea 1.75 Feb/19
Singapore 1.66 Feb/19
Australia 1.50 Mar/19
United Kingdom 0.75 Feb/19
Euro Area 0.00 Mar/19
France 0.00 Mar/19
Germany 0.00 Mar/19
Italy 0.00 Mar/19
Netherlands 0.00 Mar/19
Spain 0.00 Mar/19
Japan -0.10 Mar/19
Switzerland -0.75 Feb/19


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