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Monetary Policy Decision (April 17, 2025)

The Monetary Policy Board (MPB) of the Bank of Korea decided to leave
the Base Rate unchanged at 2.75% for the intermeeting period.

2025 Central Banking Study Program

Strengthening participant capacities and
enhancing communication channels among central banks

BOK Base Rate 2.75% Inflation Target 2.0%

BOK Issue

Monetary Policy Report Executive Summary for Monetary Policy Report (March 2025) The Bank of Korea has shifted its monetary policy stance, cutting the Base Rate by 0.75%p in total on three occasions as downward pressure on economic growth has increased amid a stabilization in inflation and a slowing trend in household debt. 2025. 03. 13

Korea Economic Outlook Economic Outlook (February 2025) Economic growth is expected to slow down to 1.5% this year, falling significantly below the previous outlook, as both exports and domestic demand face increasing downward pressures due to the implementation of U.S. tariff policies and heightened domestic political uncertainties. 2025. 02. 25

BOK Working Paper BOK Working Paper No.2025-3, BOK-LOOK: A Semi-Structural Model for Korea’s Open Economy and Monetary Policy Analysis This paper introduces BOK-LOOK, a large-scale, semi-structural model developed by the Bank of Korea to support its forecasting and policy analysis. Inspired by the FRB/US model, it is estimated using a fully Bayesian method to ensure robust parameter estimation and empirical consistency. The model employs a VAR-based expectations framework and polynomial adjustment cost specifications to balance theoretical coherence with empirical adaptability. The model features a detailed external sector by the inclusion of a high-resolution foreign blocks and financial synchronization channels that captures the impact of the global business and financial cycle to Korean economy. Consequently, BOK-LOOK is tailored to generate internally consistent projections for key macro variables and supports various scenario analyses. Another distinctive feature is its comprehensive treatment of financial stability concerns through the explicit incorporation of household debt and housing prices dynamics, reflecting Korea's unique economic and financial characteristics. By providing both economic forecast and counterfactual analysis capabilities, the model establishes a coherent framework for understanding macroeconomic dynamics and informing monetary policy decisions. 2025. 02. 03

Speeches 2025 New Year Speech by Governor Chang Yong Rhee Ladies and gentlemen, Before delivering my New Year's speech, I would first like to express my deepest condolences and sympathy to the victims and their families affected by the tragic plane crash. Today marks the beginning of our first day of work in 2025. I had hoped to greet you with a message of hope and a bright future, but recent events have put a damper on that. I now stand before you with a very heavy heart due to the recent political upheavals and the tragic incident. 2025. 01. 02

Press Releases Assessment of Financial and Economic Impacts Following the Declaration of Martial Law and Approach to Response The Bank of Korea (BOK) convened an irregular Monetary Policy Committee meeting immediately after the declaration of martial law to implement market stabilization measures. Additionally, Emergency Task Force meetings have been held on a daily basis to assess domestic financial and economic conditions. 2024. 12. 15

Korea Economic Outlook Economic Outlook (November 2024) Economic growth is expected to moderate from 2.2% this year to 1.9% next year, with the recovery of domestic demand remaining moderate and growth in exports, which has been strong over the past quarters, gradually slowing down. 2024. 11. 28

BOK Regional Economic Report (BOK Golden Book) Regional Economic Report (September 2024) Our survey results show that regional economic activity in the third quarter of 2024 slightly improved compared to the previous quarter. Manufacturing production remained flat, with an increase in the semiconductor and display industries, despite a decrease in the motor vehicles and iron & steel industries. Services production increased slightly, with an increase in the real estate and transportation industries despite remaining flat in the wholesale & retail trade and finance & insurance industries. 2024. 10. 17

Research Papers

BOK Working Paper (in English) BOK Working Paper No.2025-11, A Large Bayesian Vector Autoregression of the Yield Curve and Macroeconomic Variables with No-Arbitrage Restriction Author: Sunho Lee(Bank of Korea), Kyu Ho Kang(Korea University) Interactions between macroeconomic variables and the government bond market are of m... 2025.05.16

BOK Working Paper (in English) BOK Working Paper No.2025-10, Demand for Home Pension and Reverse Mortgage: An Information Provision Survey Experiment Author: Duk Gyoo Kim(Yonsei University), In Do Hwang(Bank of Korea) Elderly poverty is a distinctive issue associated with the population structure ... 2025.05.15

BOK Issue Note The Shift Toward Experienced Hires : Implications for Youth Employment [BOK Issue Note 2025-01] 1. Recently, an increasing number of companies have been favoring experienced hires over entry-level candidates, shifting from regular public recruitm... 2025.05.09

BOK Issue Note Impact of shareholder return policy on firm value [BOK Issue Note 2025-05] Interest in shareholder returns is growing as a means of enhancing the value of domestic listed companies (Value-up Program). Expanding shareholder re... 2025.05.08

Annual Reports 2024 Annual Report 1. This is an unofficial translation prepared by the Bank's staff based on the original Korean text released on March 28, 2025. 2. Contents &... 2025.05.02

BOK Issue Note Transforming The Future: The Impact of Artificial Intelligence in korea [BOK Issue Note 2025-02] This paper examines the transformative effects of Artificial Intelligence (AI) in Korea. Korea is among the global frontrunners in AI adoption, with h... 2025.04.28

Monetary Policy Reports Monetary Policy Report (March 2025) - This report is the English version of the Bank of Korea's Monetary Policy Report published on March 13, 2025. In case of any inconsistency, t... 2025.04.24

BOK Working Paper (in English) BOK Working Paper No.2025-9, Investment Giants in Emerging Markets Author : Daisoon Kim(NC State University), Jee Won Park(Korea Institute for International Economic Policy), Inhwan So(Bank of Korea) A small group o... 2025.04.21

BOK Issue Note Potential Growth of Korea and Its Outlook [BOK Issue Note 2024-33] 1. This paper estimates the potential growth of the Korean economy, taking into account the impact of the COVID-19 pandemic, demographic shifts, and s... 2025.04.03

Korea Economic Outlook Korea Economic Outlook (February 2025) In order to provide a detailed understanding of Korea's economic outlook, a translation of the Economic Outlook is now published quarterly. 2025.04.01

Quarterly/Economic Analysis [Vol.31 No.1] Analysis of Government Spending Multiplier: A Multivariate VAR Model Approach Author: Sehun Kim(Sogang University), Joonyoung Hur(Sogang University) Economic agents base decisions on expectations of future fiscal policy changes... 2025.03.31

Quarterly/Economic Analysis [Vol.31 No.1] The Relationship between Liquidity Return and Exchange Rate Based on the Scapegoat Theory: Evidence from South Korea Author: Cheolbeom Park(Korea University) Using data from South Korea, this paper shows that the explanatory power of liquidity returns for the excha... 2025.03.31

BOK Working Paper (in English) BOK Working Paper No.2025-8, Monetary-Fiscal Policy Mix and Inflation in Korea Author : Sora Chon(Inha University), Wongi Kim(Sungshin Women's University), Seri Shim(Bank of Korea) This paper investigates the monetary-fisca... 2025.03.28

BOK Issue Note Impact of Climate Change Risk on the Real Economy: Climate Action Scenario Analysis [BOK Issue Note 2024-30] ① This paper examines the impact of climate change risk on Korea's real economy. The results show that climate change risk exerts a negative effect on... 2025.03.20

BOK Issue Note Analysis of Regional Economic Growth Factors and Balaced Development Centered on Hub Cities [BOK Issue Note 2024-15] As Korea experiences a slowdown in economic growth, the gap between regional growth rates has recently been further widening. In particular, compared ... 2025.03.18

BOK Working Paper (in English) BOK Working Paper No.2025-6, A Properly Ordered Zero Sign Restrictions on VARX for a Small Open Economy Author : Ki-Ho Kim(Bank of Korea) Responses to shocks of endogenous variables and those to shocks of exogenous variables are mixed when rotation mat... 2025.03.14

BOK Working Paper (in English) BOK Working Paper No.2025-7, Monetary and central bank information shocks: Tales from alternative identifications Author : Bosung Jang(Korea Capital Market Institute), Inhwan So(Bank of Korea) Jarociński and Karadi (2020) proposed a straightforward method to de... 2025.03.14

Monetary Policy Reports Executive Summary for Monetary Policy Report (March 2025) Monetary Policy Report at a Glance Monetary Policy Decisions Base Rate Cut from 3.50% to 2.75% The Bank of Korea has shifted its monetary pol... 2025.03.13

BOK Working Paper Paper (in Korean) BOK Working Paper No.2025-5, The Impact of Inflation Experience on Housing Demand Author : Youngjun Choi(Bank of Korea) 2025.03.04

Financial Stability Report Financial Stability Report (December 2024) - Please refer to the attached PDF file. - This is a translation prepared by the Bank's staff based on the original Korean text released on Dec... 2025.02.28

Press Releases

Household Credits in Q1 2025 □ Total household credits outstanding increased by 2.8 trillion won in Q1 2025 to stand at 1,928.7 trillion won as of end-March, with household loans ... 2025.05.20

Export/Import Price Indexes and Trade Indexes - April 2025(preliminary) □ The Export Price Index (KRW basis) decreased 1.2 percent from the previous month. o The index increased 0.7 percent o... 2025.05.16

Monetary and Liquidity Aggregates (March 2025) □ Broad Money (M2, seasonally adjusted, period-average) decreased by 0.1% 2025.05.15

Financial Market Trends in April 2025 Please refer to the attached files. 2025.05.14

Balance of Payments during March 2025 (preliminary) □ During March 2025, the Korean current account registered a surplus of 9.14 billion dollars. □ Looking at the financial account, net assets inc... 2025.05.09

Official Foreign Reserves(April 2025) Please refer to attached files. 2025.05.08

Interest Rates (Mar 2025) □ In March 2025, the average interest rate on new deposits was 2.84%, down 13 basis points from the previous month. ― The average interest rat... 2025.04.30

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