Bank of Korea Keeps Interest Rates Unchanged amid Economic Downturn Risk

The Bank of Korea kept its seven-day repo rate at 3.5% on Thursday, pausing rate hikes for the first time in a year. The decision reflects the Bank of Korea's board members worried that the 18-month monetary tightening cycle has brought a series of adverse effects on the South Korean economy. The country's economy has contracted in the fourth quarter of 2022, and housing prices have also fallen rapidly. After the interest rate decision was announced, South Korea's three-year bond yield fell 6 basis points to 3.6%, and the USD/KRW fell 0.1% to 1305.2.