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Monetary Policy Decision (January 16, 2025)

The Monetary Policy Board (MPB) of the Bank of Korea decided to leave
the Base Rate unchanged at 3.00% for the intermeeting period.

2024 Central Banking Study Program

Strengthening participant capacities and
enhancing communication channels among central banks

BOK Base Rate 3.00% Inflation Target 2.0%

BOK Issue

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

Monetary Policy Report Executive Summary for Monetary Policy Report (September 2024) Looking at economic and financial developments at home and abroad between February and August 2024 and at the outlooks for these developments, the global economy is expected to continue its modest growth, affected by the sustained slowing trend of inflation and the continued easing of monetary policy stances in major countries. However, uncertainties regarding their economic trends have increased somewhat. 2024. 09. 12

Research Papers

BOK Working Paper (in English) BOK Working Paper No.2025-3, BOK-LOOK: A Semi-Structural Model for Korea’s Open Economy and Monetary Policy Analysis Author : Seungryul Jeong(Bank of Korea), Seokil Kang(Bank of Korea), Hyungbae Cho(Bank of Korea), Jinwoon Yoon(Bank of Korea), Dongjae Lee(Bank of Kor... 2025.02.03

BOK Working Paper (in English) BOK Working Paper No.2025-2, The Impact of Global Supply Chain Shocks on Production Costs Author : Bongseok Choi(Kookmin University), Hyun Hak Kim(Kookmin University), Sangho Shin(Bank of Korea) This study examines the impact of global s... 2025.01.22

BOK Working Paper Paper (in Korean) BOK Working Paper No.2025-1, An Empirical Approach to the Causes of Low Fertility Rate in North Korea Author : Jooyung Lee(Bank of Korea), Kiho Kim(Bank of Korea) This paper estimated the total fertility rate by surveying the marriage and childbirth ... 2025.01.21

Korea Economic Outlook The Path to a Carbon Neutral Economy: Current Status and Challenges of Korea's Climate Technologies (Korea Economic Outlook (November 2024) In-depth Analysis) This is a translation of the Economic Outlook (November 2024) In-depth Analysis, "The Path to a Carbon Neutral Economy: Current S... 2025.01.20

BOK Issue Note Strategies for Introducing Green CLOs to Enhance Green Financing [BOK Issue Note 2024-21] ① Although pressure is increasing for small and medium-sized enterprises (SMEs), especially exporting companies, to reform their production structures... 2025.01.20

BOK Issue Note Recent Trends in Domestic Banks’ Management of Financed Emissions and Policy Implications [BOK Issue Note 2024-20] In recognition of the key role of financial institutions in allocating funds for low-carbon transition, global banks have increasingly led effo... 2025.01.13

Korea Economic Outlook Three Key Factors Shaping Korea's Recent Exports (Korea Economic Outlook (November 2024) Key Issues) This is a translation of the Economic Outlook (November 2024) Key Issues, "Three Key Factors Shaping Korea's Recent Exports" 2025.01.13

Korea Economic Outlook Korea Economic Outlook (November 2024) In order to provide a detailed understanding of Korea's economic outlook, a translation of the Economic Outlook is now published quarterly. 2025.01.10

BOK Regional Economic Report (BOK Golden Book) Regional Economic Report (December 2024) This is a condensed English version of the Regional Economic Report published in Korean on December 23, 2024. Regional economic conditions in the... 2025.01.09

Quarterly/Economic Analysis [Vol.30 No.4] Climate Change and the Role of the Bank of Korea: Focusing on Its Mandates and Policy Instruments Author: Hee-Yul Chai(Kyonggi University), Sehoon Kwon(Sangmyung University), Jinill Kim(Korea University), Donghun Joo(Hanyang University), Sang Buhm ... 2024.12.31

Quarterly/Economic Analysis [Vol.30 No.4] Estimating the cost of carbon reduction and impact analysis of response to climate change by industry Author: Shinae Park(Sangmyung University), Sangyong Joo(Konkuk University), Eseul Choi(Bank of Korea), Dongjin Lee(Sangmyung University) This paper ... 2024.12.31

Financial Statement Analysis Financial Statement Analysis for 2023 FOREWORD The Bank of Korea is pleased to release the 2023 edition of its Financial Statement Analysis (FSA), published annually since 1960 to p... 2024.12.17

BOK Issue Note Stylized Facts and Implications of the Price Level in Korea: With a Focus on Comparisons with Other Major Countries [BOK Issue Note 2024-14] Despite the recent slowdown in inflation, the price level in Korea has increased considerably due to the accumulated impact of price hikes... 2024.11.29

BOK Issue Note Structural Changes in the Korean Economy and Policy Implications in Relation to Global Supply Chains [BOK Issue Note 2024-28] The perception of global supply chains has shifted dramatically. Once hailed as the engine of economic growth, global supply chains are now seen ... 2024.11.18

Monetary Policy Reports Monetary Policy Report (September 2024) - This report is the English version of the Bank of Korea's Monetary Policy Report published on September 12, 2024. In case of any inconsi... 2024.11.15

BOK Working Paper (in English) BOK Working Paper No.2024-13, Exploring the Natural Interest Rate in Korea: A Multi-Model Approach Author : Kyeongtak Do(Bank of Korea), Ju Hyun Ahn(Bank of Korea), Hae Ri Jung(Bank of Korea) To explore the historical and recent developments of t... 2024.11.03

BOK Working Paper (in English) BOK Working Paper No.2024-12, Digital Literacy and Physical Cash Demand during the COVID-19 Pandemic Author : Kyeongtae Lee(Bank of Korea), Jaevin Park(Soongsil University) We examine the impact of the COVID-19 pandemic on consumers’ cash demand an... 2024.10.31

BOK Regional Economic Report (BOK Golden Book) Regional Economic Report (September 2024) This is a condensed English version of the Regional Economic Report published in Korean on September 30, 2024. Regional economic conditions in the Rep... 2024.10.17

Korea Economic Outlook Consumption: Where It Stands and Where It's Headed (Korea Economic Outlook (August 2024) BOX 3) This is a translation of the Economic Outlook (August 2024) BOX 3, "Consumption: Where It Stands and Where It's Headed" 2024.10.15

Quarterly/Economic Analysis [Vol.30 No.3] Causes and Policy Implications for Ultra-Low Birth Rates: Evidence from OECD Countries Author: Won Sung(Bank of Korea), Inkyung Yoo(Bank of Korea), Jongwoo Chung(Bank of Korea) We analyze the determinants of the total fertility rate cha... 2024.09.30

Press Releases

Business Survey and Economic Sentiment Index (ESI) for Feb 2025 ※ Refer to the attached file for details 2025.02.21

Consumer Survey for February 2025 The Composite Consumer Sentiment Index (CCSI) for February 2025 stood at 95.2, 4.0 points higher than in January 2025. ... 2025.02.20

Producer Price Index - January 2025(preliminary) □ The Producer Price Index increased by 0.6% month-on-month in January 2025 ―in year-on-year terms it increased by 1.7%. □ The month-on-month change... 2025.02.20

Household Credits in Q4 2024 □ Total household credits outstanding increased by 13.0 trillion won in Q4 2024 to stand at 1,927.3 trillion won as of end-December, with household lo... 2025.02.18

Export/Import Price Indexes and Trade Indexes - January 2025(preliminary) □ The Export Price Index (KRW basis) increased 1.2 percent from the previous month. o The index increased 8.5... 2025.02.14

Monetary and Liquidity Aggregates (December 2024) □ Broad Money (M2, seasonally adjusted, period-average) increased by 1.0% 2025.02.13

Financial Market Trends in January 2025 Please refer to the attached files. 2025.02.12

BOK Update

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