The Monetary Policy Board of the Bank of Korea on 10 April 2026 kept the Base Rate unchanged at 2.50 percent, judging that elevated geopolitical uncertainty from the Middle East conflict is simultaneously boosting global energy‐driven inflation pressures and weighing on domestic growth prospects. After two 25 bp reductions in February and May 2025 that brought the rate to its current level, the Board has held policy steady. Headline consumer price inflation accelerated to 2.2 percent y/y in March from 2.0 percent in February, while core inflation edged down to 2.2 percent and one-year-ahead expectations inched up to 2.7 percent; full-year CPI is now seen “considerably” above the prior 2.2 percent forecast, with core also likely higher. Output has been supported by strong semiconductor exports and a rebound in consumption, yet growth this year is expected to fall short of February’s 2.0 percent projection as higher energy costs and supply bottlenecks bite; employment gains continue, and household loan growth remains subdued amid cooling housing prices in Seoul. Externally, the won briefly weakened past KRW 1,500 per USD and bond yields spiked before retreating following a temporary U.S.–Iran cease-fire, underscoring heightened market volatility. Globally, AI-related investment and fiscal support underpin activity, but energy price surges and tighter financial conditions threaten to slow expansion. The Board reiterated that future moves will depend on how the Middle East situat
Bank of Korea 2026-04-10
Bank of Korea keeps Base Rate unchanged at 2.50%
Bank of Korea’s Monetary Policy Board unanimously left the Base Rate at 2.50% on 10 April 2026, citing Middle East conflict–related energy price shocks and softer growth prospects. March headline CPI rose to 2.2% y/y and inflation is now expected to exceed the earlier 2.2% full-year forecast, while GDP growth is projected to undershoot February’s 2.0% estimate.