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Monetary Policy Decision(May 29, 2025)

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

2025 Central Banking Study Program

Strengthening participant capacities and
enhancing communication channels among central banks

BOK Base Rate 2.50% Inflation Target 2.0%

BOK Issue

Speeches Speech Commemorating the Bank's 75th Anniversary by Governor Chang Yong Rhee My dear colleagues at the Bank of Korea, Seventy-five years ago, the Bank of Korea took its first step with the mission of contributing to the sound development of the national economy through pursuing price stability. Since that day, we have faithfully fulfilled our responsibilities through every chapter of our nation’s history, bringing us to where we stand today. I would like to express my deepest respect to our predecessors who devoted themselves to setting and implementing monetary policy over the decades. I also extend my sincere gratitude to the members of the Monetary Policy Board, who continue to serve as a guiding compass for the Bank, and to all the staff who have diligently carried out their duties in their respective roles. Above all, I would like to extend my heartfelt appreciation to the families of our staff, whose steadfast support has been a constant source of strength. 2025. 06. 12

Korea Economic Outlook Economic Outlook (May 2025) Economic growth is expected to slow to 0.8% this year, falling significantly below the February forecast of 1.5%, as the recovery of economic sentiment has been delayed beyond expectations due to domestic and global uncertainties, and due to U.S. tariff policies that have been strengthened compared to the beginning of the year. 2025. 05. 29

Annual Reports 2024 Annual Report This Annual Report provides an overview of Korea’s financial and economic conditions in 2024, as well as the Bank of Korea’s operations and management activities. We have strived to present a well-structured summary of the year’s developments and to enhance the report’s connection with other materials. We hope this report helps the public gain a better understanding of the state of the Korean economy and the Bank of Korea’s role. 2025. 05. 02

Monetary Policy Report Monetary Policy Report (March 2025) The Bank of Korea Act stipulates the goal of monetary policy as follows: “The Bank shall contribute to the sound development of the national economy through ensuring price stability, while giving due consideration to financial stability in carrying out its monetary policy.” In order to enhance the transparency, predictability, and effectiveness of monetary policy, the Bank will carry out its task by setting specific targets and objectives in accordance with this goal. 2025. 04. 24

Financial Stability Report Financial Stability Report (December 2024) Recently, volatility in financial and foreign exchange markets has increased due to high uncertainty at home and abroad. However, considering the favorable resilience of financial institutions and external payment capacity, Korea’s financial system has been generally stable. Caution needs to be exercised regarding the increase in market volatility associated with uncertainty at home and abroad as well as the accumulation of financial imbalances during monetary policy easing. 2025. 02. 28

Research Papers

BOK Issue Note Bank of Korea’s Open Market Operations: Navigating the Past, Envisioning the Future [BOK Issue Note 2025-11] 1. Central banks’ open market operations (OMO) have evolved in various ways in response to changes in the financial and economic conditions of each co... 2025.06.11

BOK Issue Note Credit Concentration in the Real Estate Sector : Structural Drivers and Risks [BOK Issue Note 2025-09] ① Over the past decade, financial institutions’ credit supply has been increasingly concentrated in the real estate sector. By the end of 2024, the to... 2025.06.11

BOK Working Paper (in English) BOK Working Paper No.2025-12, Demographic Shifts and the Real Interest Rate in an Open Economy: The Case of Korea Author: Jae Won Lee(Bank of Korea), Woong Yong Park(Seoul National Univ.), Seolwoong Hwang(Bank of Korea) This study investigates the impact of... 2025.06.04

BOK Working Paper (in English) BOK Working Paper No.2025-13, Population Aging and Financial Stability: An Empirical Analysis Author: Hun Jang(Bank of Korea) This study empirically examines the impact of population aging on financial stability. Constructing an unbalanc... 2025.06.04

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

Press Releases

Export/Import Price Indexes and Trade Indexes - May 2025(preliminary) □ The Export Price Index (KRW basis) decreased 3.4 percent from the previous month. o The index decreased 2.4 percent o... 2025.06.17

Monetary and Liquidity Aggregates (April 2025) □ Broad Money (M2, seasonally adjusted, period-average) increased by 0.2% 2025.06.16

Financial Market Trends in May 2025 Please refer to the attached files. 2025.06.11

Financial Statement Analysis for 2024 In 2024, the indicators of growth and profitability improved year-on-year. ※Please refer to the attached files for detalis. 2025.06.11

Industrial Loans of Depository Corporations during Q1 2025 □ Depository corporations increased their industrial lending by 17.3 trillion won in the first quarter of 2025. 2025.06.10

Balance of Payments during April 2025 (preliminary) □ During April 2025, the Korean current account registered a surplus of 5.70 billion dollars. □ Looking at the financial account, net assets increase... 2025.06.10

Gross National Income: First Quarter of 2025 (Preliminary) ◈ Real gross domestic product (real GDP, chained volume measure of GDP) decreased by 0.2 percent in the first quarter of 2025 compared to the previous... 2025.06.05

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