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2025-12-16 14:43:06
[Nomura Securities: Bank of Korea Has Ended Its Current Rate Cut Cycle] 1. Nomura Securities released a report predicting that the Bank of Korea has ended its current rate cut cycle and is likely to maintain the benchmark interest rate at its current level in 2026. The risk of further policy changes has shifted from rate cuts to rate hikes. 2. Nomura economist Jeong Woo Park stated that this shift in policy expectations is mainly based on market predictions that the South Korean economy will expand at a rate higher than its potential growth rate in 2026. This is driven by strong domestic consumption, a recovery in the construction industry, and the upward cycle in the global semiconductor industry. He added that the South Korean economy is expected to close the output gap (i.e., actual output reaches or exceeds potential output levels) by around the second quarter of next year, a process earlier than the Bank of Korea's own forecast, thus reducing the need for further monetary easing.
