Bank of Korea Rate Decision Analysis (2025-11-26): Steady Policy Amid FX Risks and Upgraded Forecasts

The Bank of Korea (BOK) maintained its benchmark interest rate at2.50% on November26, 2025[3], marking the fourth consecutive hold. This decision was driven by dual constraints: a depreciating won (down ~4% in Q4)[1] and a heating Seoul property market (apartment prices up0.2% week ending Nov17)[1]. The BOK revised its economic forecasts upward: 2025 GDP to1.0% (from0.9%) and inflation to 2.1% (from 2.0%)[1].
Market impacts were mixed: KOSPI rose 1.77% on Nov26 and an additional0.47% on Nov27[0], reflecting relief at no policy surprise. The USD/KRW exchange rate increased by 0.19%[2], as rate cut expectations were pushed back to Q12026[1].

Cross-domain correlations emerged: FX volatility limited the BOK’s easing options even as growth remained subdued. The shift in board member stance (from5 to 4 open to rate cuts)[1] signals a more cautious policy approach. A trade-off exists: weaker won benefits export sectors (tech, autos) but raises import inflation risks[1].

: FX volatility may hurt importers and increase inflation[1]; property market overheating could trigger macroprudential measures[1]; delayed rate cuts may suppress domestic consumption[1].
: Weaker won supports exporters[1]; upgraded growth forecasts boost equity market sentiment[0]; steady rates maintain financial stability amid global uncertainty.

Key metrics: BOK rate (2.50% unchanged), 2025 GDP (1.0% up 0.1pp), inflation (2.1% up0.1pp)[1]; KOSPI gains (~2.24% post-decision)[0]; USD/KRW up0.19%[2]. Context: FX risks and property market heat are primary policy constraints. Rate cuts are delayed to Q12026[1].