The Bank of Korea (BoK) left its key interest rate unchanged today, noting that “proactive fiscal and monetary policy” measures have stabilised GDP. But despite signs of recovery, there are still significant downside risks. Rising household indebtedness means the ongoing labour market deterioration will hit consumer spending hard. In addition, weaker-than-expected import figures highlight the fragility. The upshot is that while market participants expect rates to be heading higher again by year-end, we think further rate cuts are more likely and that they will stay at record lows for the foreseeable future. • The BoK left its policy