BoK reveals split vote as three members signal openness to near-term rate cuts

Bank of Korea Governor Rhee Chang-yong said Thursday’s policy decision was not unanimous, revealing that board member Shin Sung-hwan dissented. Shin argued domestic demand remains too weak to justify the board’s majority position. Rhee noted that three other board members indicated they were open to a near-term rate cut, highlighting a more divided committee as growth risks persist.

Rhee said Korea’s economic growth next year is expected to be close to its potential rate, but cautioned that heightened foreign-exchange volatility remains a key concern, particularly given its potential pass-through to inflation. The remarks underscore the BoK’s delicate balancing act between managing price pressures, weak domestic demand and increasing calls within the board for earlier easing.

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Rhee says the board is split 50:50 on whether to cut rates or hold in the near term.
The forex market has been showing herd-like behaviour.
FX volatility is partly due to residents’ foreign stock buying.
The won is declining more than peer currencies.
South Korea’s CDS premium is stable.
Rhee is concerned a weaker won could push consumer prices higher.
Domestic-focused companies may be hurt by a declining won.