The Bank of Korea has decided to keep its seven-day repurchase rate unchanged at 2.5%, a move consistent with market expectations. This decision continues the pause in monetary policy adjustments that has been in place since July of last year.

The central bank's choice comes against a backdrop of stable inflation and relatively resilient economic growth. In March, South Korea's consumer prices rose by 2.2% year-on-year, accelerating from the 2% increase seen in February, yet remaining close to the central bank's target level.

Earlier this year, in February, the Bank of Korea had already revised its growth outlook upwards for 2026. However, ongoing conflicts in the Middle East are simultaneously posing risks to both inflation and economic growth. As a major buyer heavily reliant on energy imports from the Middle East, South Korea is facing increasing pressure from rising global oil and gas prices, which are driving up import costs.

Furthermore, the South Korean won has weakened significantly in recent weeks, influenced by foreign capital outflows and rising oil prices. Despite these challenges, the nation's economic growth continues to demonstrate resilience. Strong exports in March, driven by record demand for AI-related semiconductors and robust shipments to China, have contributed to this sustained momentum.