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Monetary Policy Decision (February 25, 2025)

The Monetary Policy Board (MPB) of the Bank of Korea decided to lower the Base Rate by 25 basis points,
from 3.00% to 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 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.2025-7, 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

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

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

BOK Working Paper Paper (in Korean) BOK Working Paper No.2025-4, The Effect of Climate Change on the Korean Labor Market Author : Myungkyu Shim(Yonsei University), Soojin Jo(Yonsei University) 2025.02.26

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] 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

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

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

Press Releases

Producer Price Index - February 2025(preliminary) □ The Producer Price Index increased by 0.0% month-on-month in February 2025 ―in year-on-year terms it increased by 1.5%. □ The month-on-month chang... 2025.03.21

BOK Launches Intellectual Services Trade Statistics □ The Bank of Korea, in collaboration with the government, has successfully completed the Services Trade Statistics Enhancement Project, launched in J... 2025.03.19

Monetary and Liquidity Aggregates (January 2025) □ Broad Money (M2, seasonally adjusted, period-average) increased by 0.5% 2025.03.17

Export/Import Price Indexes and Trade Indexes - February 2025(preliminary) □ The Export Price Index (KRW basis) decreased 0.6 percent from the previous month. o The index increased 6.3... 2025.03.14

Financial Market Trends in February 2025 Please refer to the attached files. 2025.03.12

Industrial Loans of Depository Corporations during Q4 2024 □ Depository corporations increased their industrial lending by 3.3 trillion won in the fourth quarter of 2024. 2025.03.07

Balance of Payments during January 2025 (preliminary) □ During January 2025, the Korean current account registered a surplus of 2.94 billion dollars. □ Looking at the financial account, net ass... 2025.03.07

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