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Monetary Policy Decision (July 16, 2026)

The Monetary Policy Board (MPB) of the Bank of Korea decided to raise the Base Rate by 25 basis points,
from 2.50% to 2.75% for the intermeeting period.

2026 Central Banking Study Program

Strengthening particiapnt capacities and
enhancing communication channels among central banks

BOK Base Rate 2.75% Inflation Target 2.0%

BOK Issue

BOK Issue Note What Makes the Current Terms-of-Trade Improvement Different? Real-Economy Spillovers from the Semiconductor Upturn [BOK Issue Note 2026-16] The Korean economy recorded strong GDP growth of 3.8% year on year in the first quarter of this year, supported by the semiconductor upturn. At the same time, rising semiconductor prices led to a marked improvement in the terms of trade, lifting gross domestic income (GDI) by 13.2%, far outpacing GDP growth. The increase in GDI is expected to support a recovery in domestic demand by strengthening household purchasing power and firms’ capacity to invest. In particular, if global semiconductor demand remains strong and the improvement in the terms of trade—and the resulting rise in GDI—persists for an extended period, its macroeconomic spillovers could differ from those observed in the past. This paper compares the characteristics of the current terms-of-trade improvement and its spillovers to domestic demand with past episodes, and draws policy implications. 2026. 07. 19

BOK Issue Note The Effects of Overseas Investment and Investment Income on the Exchange Rate [BOK Issue Note 2026-15] 1. Korea’s overseas investment has increased sharply in recent years, led by portfolio investment. In 2025, direct investment declined to USD 41.2 billion from USD 49.7 billion in 2024, whereas portfolio investment reached USD 140.3 billion, more than double the USD 67.0 billion recorded in 2024. As a result, the ratio of portfolio investment to GDP also rose sharply, from 3.6% (2024) to 7.5% (2025). The expansion of overseas investment leads to the accumulation of external assets and an increase in net external financial assets; over the long run this is positive in that it helps expand investment income receipts, enhance the buffer of foreign currency liquidity, and strengthen external payment capacity. At the same time, Korea’s recent portfolio investment has expanded somewhat steeply, with both its scale and its ratio to GDP overtaking those of Japan (USD 102.8 billion, 2.3% in 2025). 2026. 07. 16

BOK Issue Note Evaluation of the Economic Effects of People`s Livelihood Recovery Consumption Coupons [BOK Issue Note 2026-13] ① The People’s Livelihood Recovery Consumption Coupons were incorporated into the 2025 supplementary budget to stimulate household consumption and boost sales for small business owners, with KRW 13.522 trillion distributed to all citizens. In practice, around 70% of the coupons were issued through credit cards, while the remainder were provided in the form of Local Love Gift Certificates and prepaid cards. To evaluate the economic effects of the coupons, this paper analyzes their direct effects in terms of sales growth at eligible merchants and the stimulation of household consumption. First, we examine the sales-boosting effect using large-sclae credit card sales data from six card companies*(Local Love Gift Certificates and prepaid cards are excluded from the analysis). In addition, we assess the consumption-stimulating effect based on two-waveAugust 13-20, 2025(1st) and October 27-November 7, 2025(2nd) self-reported surveys**. 2026. 07. 08

Blog Does AI Adoption Improve Productivity? It has been nearly three years since ChatGPT launched. AI has already become an irreplaceable tool for many workers. It is no longer unusual to ask AI to draft a report or to use AI for data analysis. In fact, as of 2025, more than half of employed persons in Korea (51.8%) are using generative AI at work, and this pace is as much as eight times faster than the diffusion of the Internet in the past[Figure 1]. 2026. 07. 22

Speeches Governor Hyunsong Shin at the ECB Forum on Central Banking 2026 Governor Shin presented a paper titled "A unified ledger in practice: lessons from Project Hangang" at the European Central Bank Forum on Central Banking 2026. The video(Seesion 4, 1:07:48) can be accessed via the following link. 2026. 07. 01

Speeches Speech Commemorating the Bank's 76th Anniversary by Governor Shin Hyun Song Distinguished colleagues of the Bank of Korea, Today marks the 76th anniversary of the founding of the Bank of Korea. I would like to take this opportunity to express my deepest gratitude to our predecessors, who have devoted themselves to the development of both the Bank of Korea and our economy since the Bank’s establishment. I would also like to extend my sincere appreciation to the members of the Monetary Policy Board for their leadership in monetary policy, to all our staff members who continue to give their best in their respective roles, and to the families whose steadfast support makes their dedication possible. 2026. 06. 24

BOK Issue Note Does AI Adoption Improve Productivity? Effects Over the First Three Years [BOK Issue Note 2026-12] ① As generative AI rapidly diffuses across the economy, expectations for a productivity revolution are growing, yet macroeconomic productivity indicators have not yet shown clear improvement. Using a household survey, this paper empirically examines whether AI adoption generates potential productivity gains through reductions in work time, and whether such time savings translate into realized output growth. 2026. 06. 24

Research Papers

BOK Regional Economic Report (BOK Golden Book) Regional Economic Report(July 2026) This is a condensed English version of the Regional Economic Report published in Korean on July 29, 2026. Regional economic conditions in the Regional... 2026.08.18

BOK Issue Note What Makes the Current Terms-of-Trade Improvement Different? Real-Economy Spillovers from the Semiconductor Upturn [BOK Issue Note 2026-16] The Korean economy recorded strong GDP growth of 3.8% year on year in the first quarter of this year, supported by the semiconductor upturn. At the sa... 2026.08.04

BOK Working Paper (in English) BOK Working Paper No.2026-13, Good Housing Booms, Bad Housing Booms: Classifying Local Housing-Market Episodes and Their Macroeconomic Consequences Author : Sangyup Choi(Yonsei University), Junghyuk Lee(Bank of Korea) How can we distinguish good housing booms from bad ones? We develop a high-freq... 2026.08.03

BOK Issue Note Assessing Recent Labor Market Conditions Using Private Employment Estimates [BOK Issue Note 2026-1] ① Public employment—including senior employment programs and public‑administration employees— have increased steadily over the past several years. ② ... 2026.07.21

BOK Issue Note The Effects of Overseas Investment and Investment Income on the Exchange Rate [BOK Issue Note 2026-15] 1. Korea’s overseas investment has increased sharply in recent years, led by portfolio investment. In 2025, direct investment declined to... 2026.07.16

BOK Issue Note Evaluation of the Economic Effects of People`s Livelihood Recovery Consumption Coupons [BOK Issue Note 2026-13] ① The People’s Livelihood Recovery Consumption Coupons were incorporated into the 2025 supplementary budget to stimulate household consumption an... 2026.07.08

BOK Issue Note Asset Tokenization in Korea and Global Markets: Current Developments and Future Policy Challenges 1. The asset tokenization market-whereby rights to various financial and real assets such as loans, government bonds, money market funds (MMFs), ... 2026.07.08

BOK Working Paper Paper (in Korean) BOK Working Paper No.2026-12, Spillover Effects of External Shocks through Cross-Country Transmission Channels: A Large Bayesian Global VAR Approach Author : Sunho Lee(Bank of Korea) This study constructs a Large Bayesian Global Vector Autoregression (LB-GVAR) model covering eight major economi... 2026.07.02

Korea Economic Outlook Korea Economic Outlook (May 2026) In order to provide a detailed understanding of Korea's economic outlook, a translation of the Economic Outlook is now published quarterly. 2026.06.30

Annual Reports 2025 Annual Report 1. This is an unofficial translation prepared by the Bank's staff based on the original Korean text released on March 27, 2026. 2. Contents &... 2026.06.30

Quarterly/Economic Analysis [Vol.32 No.2] Mandatory External Audits, Disclosure Timeliness, and Re-disclosure Behavior of Public-Interest Corporations Author: Sangwha Shin(Chungnam National Univ.) This study exploits the 2020 introduction of mandatory external audits for public-interest corpora... 2026.06.30

Quarterly/Economic Analysis [Vol.32 No.2] Forcasting Household and Corporate Loan Delinquency Rates in the Banking Sector and Crisis Scenario Analysis Author: Eutteum Park(Bank of Korea), Kyu Ho Kang(Korea Univ.) This study develops a Large Bayesian VAR (LBVAR) model with 22 macro-financial var... 2026.06.30

Quarterly/Economic Analysis [Vol.32 No.2] Credit Deterioration and Insurance Policy Lapse Author: Song, Yunah(Korea Insurance Research Institute) This study examines how deteriorating credit conditions affect insurance lapse, using de... 2026.06.30

Quarterly/Economic Analysis [Vol.32 No.2] Cyclicality of Social Welfare Expenditure Author: Shinyae Noh(Seoul National Univ.), Chul-In Lee(Seoul National Univ.) To assess the income-smoothing capability of social welfare program... 2026.06.30

BOK Working Paper (in English) BOK Working Paper No.2026-11, Large Zombies, Small Victims: Evidence on Congestion Effects from Population-Level Data Author : Kyeongtae Lee(Bank of Korea) Most studies on zombie firms focus on listed firms—which account for only a small fraction of the firm populati... 2026.06.30

BOK Working Paper (in English) BOK Working Paper No.2026-10, Green Transition, Energy Substitution, and Macroeconomic Dynamics in a DSGE Model for Korea Author : Eunseong Ma(Yonsei University), Joonseok Oh(University of Southampton), Byung Goog Park(Bank of Korea), Kyounghoon Park(Bank of Korea) We st... 2026.06.30

BOK Working Paper (in English) BOK Working Paper No.2026-9, Testing Spatial Interactions with Origin-side Heterogeneity Author : Shi Ryoung Chang(Bank of Korea) This paper proposes a Lagrange Multiplier (LM) test for spatial interactions in the presence of origin-side ... 2026.06.30

BOK Working Paper (in English) BOK Working Paper No.2026-8, Beyond Homogeneity: Testing Spatial Dependence under Heterogeneous Coefficients in Large Panels Author : Shi Ryoung Chang(Bank of Korea), Robert de Jong(The Ohio State University) The widely used approach to testing spatial dependence formulates... 2026.06.30

BOK Working Paper (in English) BOK Working Paper No.2026-7, Effects of New Technology Adoption in Korea: Implications for Growth, Employment, and Inequality Author : Eunseong Ma(Yonsei University), Kisan Choi(Bank of Korea) This paper studies how new technologies interact with labor-market frictions to sh... 2026.06.30

BOK Working Paper (in English) BOK Working Paper No.2026-6, ES Activities and Labor Productivity: Evidence from Korean Manufacturing Firms Author : Seongjun Jeong(Bank of Korea), Bok-Keun Yu(Bank of Korea) This study empirically examines how firms’ environmental and social (E and S) acti... 2026.06.30

Press Releases

Producer Price Index - July 2026(preliminary) * Please refer to the attached files for further details. 2026.08.21

International Investment Position(Q2 2026) Please refer to the attached. 2026.08.20

Household Credits in Q2 2026 □ Total household credits outstanding increased by 25.9 trillion won in Q2 2026 to stand at 2,019.8 trillion won as of end-Jun, with ho... 2026.08.19

Financial Market Trends in July 2026 Please refer to the attached files. 2026.08.14

Monetary and Liquidity Aggregates (June 2026) □ Broad Money (M2, seasonally adjusted, period-average) increased by 0.7% compared to the previous month. 2026.08.14

Export/Import Price Indexes and Trade Indexes - July 2026(preliminary) * Please refer to the attached files for further details. 2026.08.14

Balance of Payments during May 2026 (preliminary) □ For June 2026, the Korean current account registered a surplus of 49.73 billion dollars. □ Looking at the financial account, net assets i... 2026.08.06

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