South Korea, Kazakhstan Hold Interest Rates Amid Inflation, Trade Uncertainty

South Korea's central bank, the Bank of Korea (BOK), has maintained its benchmark interest rate at 2.5 percent amidst concerns over soaring housing prices, rising household debt, and uncertainties linked to US tariff threats. The BOK's cautious stance reflects a priority on financial stability, particularly given the sharp increase in housing prices in the Seoul metropolitan area and record household loan growth, which have prompted government-imposed mortgage restrictions. While the BOK previously cut rates in May to support economic growth, the recent decision to hold rates acknowledges the risks of fueling further housing market overheating and debt accumulation. Additionally, ongoing trade tensions with the United States, including the threat of 25 percent tariffs on South Korean imports if negotiations fail, add complexity to the economic outlook and influence monetary policy decisions. Experts suggest that any future rate cuts this year will likely be limited and carefully balanced against real estate market conditions and speculative sentiment. Overall, the BOK remains vigilant in balancing the dual challenges of sustaining economic growth and maintaining financial and housing market stability.