Bank of Korea Signals Hawkish Rate Shift, Threatening Won and Crypto Market Liquidity

The Bank of Korea had been in a rate-cutting cycle, but the economy has proved more resilient than expected and inflationary pressure has not fully subsided. A shift from monetary easing to tightening would affect the won and corporate borrowing costs, while potentially squeezing liquidity in South Korea’s highly active crypto market.

Bank of Korea Senior Deputy Governor Ryoo Sang-dai recently said it was time to consider ending rate cuts and moving toward increases. His remarks sharply raised market expectations that the May 28 rate meeting could turn hawkish or even deliver a hike. Meanwhile, the won briefly touched its weakest level since 2009, putting the currency and crypto asset flows in focus.