South Korea’s 10-year government bond yield fell to around 3.51%, the lowest level since mid-January, as reduced bond issuance drove prices higher. Authorities announced at least 6 trillion won in cuts to first-quarter government and bank bond sales to ease upward pressure on yields and help guide market rates lower.
At the same time, the Bank of Korea left its benchmark interest rate unchanged and signaled no imminent policy shift. Under its newly adopted forward-guidance framework, the BOK’s median projection for the policy rate in six months stayed at 2.5%, underscoring a neutral stance after references to possible rate cuts were removed in January.
The central bank also upgraded its 2026 economic outlook, raising its growth forecast to 2% from 1.8% and its inflation forecast to 2.2% from 2.1%. Governor Rhee Chang-yong noted that consumption is expected to continue recovering, while export growth—driven by the semiconductor sector—is likely to accelerate, reducing the need for additional policy stimulus.
