Bank of Korea Holds Policy Rate Steady Amid Expectations of Rate Cuts

South Korea's central bank, the Bank of Korea, has kept its policy rate unchanged at 3.50%, despite growing expectations for a rate cut. The bank plans to maintain its restrictive policy 'for a sufficiently long period.' Economists forecast no rate cuts in the first quarter, with some anticipating rate cuts in the second quarter of 2024. South Korea's headline monthly inflation averaged 3.6% in 2023 and is expected to ease further to an average of 2.6% this year. The bank also expects the country's economy to grow 2.1% in 2024. Inflation in December eased for a second consecutive month, and exports expanded for a third straight month.