FX.co ★ South Korean Won Falls as BoK Cuts Rate

The South Korean won fell past the 1,380 mark against the dollar on Thursday, reversing the previous day's gains. This decline followed an anticipated rate cut by the Bank of Korea, which reduced its policy interest rate by 25 basis points to 2.5% during its meeting in May 2025, marking the lowest rate since September 2022. It was the fourth consecutive rate cut amid escalating concerns about stagnant economic growth. Furthermore, the Bank of Korea significantly slashed its growth forecast for 2025 to 0.8%, attributing the revision to weak domestic demand, sluggish exports, and uncertainties due to US tariff measures. Simultaneously, the US dollar experienced an upswing after a federal court deemed President Trump's global tariffs as exceeding his authority, labeling them unlawful and ordering their removal, although an appeal is anticipated. This decision eased some trade-related uncertainties. Investors are now keenly observing potential economic stimulus proposals in anticipation of South Korea's presidential election on June 3.