South Korea kept its interest rate at 2.50% on Oct. 23, 2025, citing property and debt risks, despite expectations of future cuts.

South Korea’s central bank held its key interest rate at 2.50% for the third consecutive meeting on October 23, 2025, citing concerns over a heated property market, rising household debt, and a 3% decline in the won against the dollar. The decision, widely expected, reflects caution amid a $350 billion U.S. trade deal that may trigger capital outflows. Despite a resilient export sector and recent rate cuts totaling 100 basis points since October 2024, policymakers remain focused on financial stability. A dovish shift was signaled, with four board members supporting future cuts, prompting market gains and further currency weakness. Analysts expect one more cut in November, followed by a pause.