Bank of Korea "Further cuts in key interest rate next year..."Risk of downside to the economy increases"

The Bank of Korea has announced that it will lower its key interest rate further next year in consideration of downside risks such as slowing economic growth in the country.

In its "2025 Monetary Credit Policy Operation Direction" report, the Bank of Korea said it would take into account the growing downside risks to the economy due to political uncertainty in the country and changes in the trade environment, including the new U.S. administration.

Financial markets also said they would implement market stabilization measures in a timely manner, such as considering an extension of the "unregular repurchase agreement" in place, and provide sufficient liquidity in the event of excessive foreign exchange volatility, while also considering easing regulations.

In addition, the Bank of Korea plans to push for ways to improve the lending system, such as preparing regulations to use loans from financial institutions as eligible collateral in the Bank of Korea's lending process.