FX.co ★ Bank of Korea Holds Rates Steady as Expected

The Bank of Korea kept its policy interest rate unchanged at 2.5% for the sixth consecutive meeting in February 2026, extending its pause in the easing cycle in line with market expectations. The unanimous decision signals policymakers’ confidence in continued support from the semiconductor sector and in stable inflation, allowing the BOK more time to evaluate financial stability risks while lessening the need for additional monetary stimulus. Officials are also closely monitoring the won’s weakness against the dollar and the risk that lower borrowing costs could fuel household debt growth. Since October 2024, the central bank has cut its benchmark rate by a cumulative 100 basis points to 2.5% to bolster economic growth and has left it unchanged since May 2025. On the macroeconomic front, the bank revised its 2026 GDP growth forecast up to 2.0% from 1.8%, while raising its projection for average inflation to 2.2% from 2.1%.