Bank of Korea Maintains Key Rate at 2.75% Amid U.S. Tariff Uncertainty

The Bank of Korea decided to keep its benchmark interest rate steady at 2.75% in April, pausing its easing cycle amid significant economic uncertainty caused by recent U.S. tariffs and volatile trade policy announcements from President Trump. This move aligns with market expectations and reflects the central bank's cautious approach as it balances the need to support a sluggish economy while maintaining financial stability and protecting the value of the Korean won. South Korea's export-driven economy has been particularly vulnerable to the impact of sweeping U.S. tariffs on automobiles, steel, and aluminum, leading to lowered growth forecasts by both domestic and international analysts. The government is also attempting to negotiate with the U.S. to delay the implementation of tariffs in order to reduce uncertainty for South Korean businesses. The decision comes ahead of a snap presidential election following political upheaval in the country, adding another layer of uncertainty. South Korea's inflation remains slightly above the central bank's target, while its stock market and currency experienced minor fluctuations following the announcement.