Bank of Korea freezes benchmark interest rate at 3.5% for seventh consecutive time

By Kim Joo-heon Posted : November 30, 2023, 14:31 Updated : November 30, 2023, 14:53
Courtesy of the Bank of Korea
[Courtesy of the Bank of Korea]
SEOUL -- South Korea's central bank has decided to freeze its key interest rate at 3.5 percent. The benchmark interest rate has remained unchanged through seven consecutive discussions since February 2023.

The Bank of Korea (BOK) determined the base interest rate during this year's last monetary policy board meeting on November 30. The BOK has maintained the benchmark interest rate in February, April, May, July, and October after raising it by 0.25 percentage points in January. 

Many South Korean monetary authorities predicted the result. In a survey of 100 bond market-related experts released by the Korea Financial Association, about 96 percent answered that the base interest will not change. The survey was conducted for five days starting on November 17. 

Prior to the BOK's announcement, Cho Yong-gu, an analyst at Shinyoung Securities, said cutting the interest rate would be challenging until the first half of 2024 due to a soft landing in the global economy and projections for inflation. The United States Federal Reserve also decided to freeze its base interest rate twice in September and November after raising it by 0.25 percentage points in July. 

Despite the extended period of high interest rates, South Korea's household debt scale reached a record high of 1875.6 trillion won ($1.4 trillion) as of the third quarter of this year. Meanwhile, the first monetary policy committee meeting in 2024 is scheduled for January 11. 
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