South Korean Won: Hawkish BoK risk as authorities flag weakness – BBH
Di FXStreet Insights Team
Aggiornato: 25 May 2026
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Brown Brothers Harriman’s (BBH) Elias Haddad expects the Bank of Korea (BoK) to hold its policy rate at 2.50%, but warns of a hawkish surprise aimed at curbing Korean Won (KRW) weakness.
Brown Brothers Harriman’s (BBH) Elias Haddad expects the Bank of Korea (BoK) to hold its policy rate at 2.50%, but warns of a hawkish surprise aimed at curbing Korean Won (KRW) weakness. KRW has been one of the worst performers since the Iran war due to South Korea’s negative energy balance, with officials calling the drop excessive as swaps price 125 bps of hikes over 12 months.
Policy hold with risk of hawkish surprise
"BoK is expected to keep the policy rate unchanged at 2.50% for an 8th consecutive meeting."
"The risk is a hawkish surprise to curtail KRW weakness."
"KRW is the fourth worst performing currency since the start of the Iran war on February 28, largely because of South Korea’s negative net energy balance."
"Last week, South Korean FX authorities warned that the currency’s drop is “excessive relative to economic fundamentals, and will take decisive action if necessary”."
"The swaps curve price in nearly 125bps of hikes in the next twelve months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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