KBS News BOK hints at policy shift / KBS 2025.11.12.

[Anchor]

Rhee Chang-yong, the Governor of the Bank of Korea, stated to foreign media that he could change the ‘direction’ of monetary policy.

Considering that interest rates have been steadily lowered since the second half of last year, this can also be interpreted to mean that they may not lower them any further.

What is the underlying meaning of this statement? Reporter Hwang Hyun-kyu analyzed it.

[Report]

Governor Rhee Chang-yong, who was on a business trip to Singapore, spoke with Bloomberg.

While mentioning the base interest rate, he brought up the term ‘direction change.’

[Rhee Chang-yong/Bank of Korea Governor: “The magnitude and timing of the cut, or even the change of direction, all depends on the new data that we will see.”]

He stated that the decision on interest rates would be based on the economic outlook data to be released on Nov. 27, but there is a subtle difference from his statement last month about continuing the interest rate cut trend.

[Rhee Chang-yong/Bank of Korea Governor/Oct. 23: “I believe there is a need to continue the trend of interest rate cuts…”]

The base interest rate was lowered from 3.5% to 3.25% in October last year, and then reduced to 2.5% over four cuts.

However, it has been frozen three times in a row since July.

This means that the trend of freezing may continue for a longer period.

The market is also considering the possibility of ‘interest rate hikes.’

Immediately after the Governor’s statement was reported, the government bond yield rose by nearly 0.1%P in one day.

[Joo Won/Head of Research at Hyundai Research Institute: “It takes considerable time for interest rates to shift from a downward trend to an upward trend. There may be an excessive interpretation of the Governor’s remarks.”]

Recent market conditions are also narrowing the room for interest rate cuts.

One of the biggest obstacles to interest rate cuts, the instability of housing prices in the metropolitan area, remains.

The sharp rise in the won-dollar exchange rate is an additional blow.

If the interest rate gap with the U.S. widens further, it will become more difficult to prevent capital outflows.

Today (11.12), the exchange rate reached 1,470 won per dollar during trading.

The weekly closing price, which reduced the increase, was 1,465 won.

It is less than 20 won away from this year’s highest price of 1,484 won.

This is KBS News, Hwang Hyun-kyu.

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