The Bank of Korea recently sent a clear signal — the rate cut train may be coming to a halt. In their statement on December 25th, they said they would decide whether to continue cutting rates next year and when to do so based on future data assessments.

Behind the seemingly moderate language lies a genuine consideration. The central bank has already held steady for the fourth consecutive time last month, keeping interest rates unchanged. Their reasoning is straightforward: the exchange rate is too weak. With the Korean won already heavily depreciated, further easing of monetary policy would only add fuel to the fire, so this rate cut cycle is essentially coming to an end.

On the other hand, the central bank is strengthening its monitoring of the foreign exchange market and is ready to act at any time to stabilize the market. The policy meeting in January next year will be a key focus; with new economic data on the table, the central bank will be able to set the tone. For market participants concerned with global liquidity and exchange rate expectations, these signals are worth paying attention to.