South Korean Won Gains as BOK Holds Rates, Softer Dollar

The South Korean won rose to around 1,390 per dollar on Thursday, extending gains from the previous session, supported by the Bank of Korea’s decision to keep its base rate unchanged at 2.50% and continued weakness in the US dollar. At its policy meeting on Thursday, the central bank maintained a guarded stance, monitoring household debt and property markets after recent regulations, while also weighing government stimulus and external risks such as US tariffs and potential Fed moves. The rate hold was widely expected, offering little new momentum, while the won’s gains were largely driven by softness in the US dollar. The greenback retreated after dovish remarks from Fed officials reinforced bets of a September rate cut. On the domestic side, the central bank also raised its 2025 GDP growth forecast to 0.9%, signaling measured optimism for the economy while keeping open the possibility of future rate cuts later in the year depending on financial stability and global conditions.