Bank of Korea needs to remain wary of financial stability risks, board member says

South Korea's central bank needs to remain wary of financial stability risks, such as heightened volatility in the won currency and upward pressure on house prices, a board member said on Tuesday.

"Volatility is increasing in financial and foreign exchange markets with sharp fluctuations in stock prices and comparative weakness in the won," said Chang Yong-sung, a member of the Bank of Korea's seven-seat monetary policy board.

The won hit on Tuesday its weakest level since early April at 1,483.5 per dollar. It has fallen more than 8% in the second half of 2025.

Chang also warned of high credit risks for some vulnerable sectors and continuously rising house prices in his comments released with the central bank's semiannual financial stability report.

In the report, the BOK said it would monitor risk factors within the financial system and proactively seek market stabilising measures if needed, though it noted most indicators of foreign exchange conditions remained stable.

Monetary policy would continue to be coordinated with macroprudential policies, it added.

The BOK held rates steady for the fourth straight monetary policy meeting last month and signalled it could be nearing the end of the current rate cut cycle, as currency weakness reduced scope for further easing.

Following the November meeting, it has rolled out various currency stabilisation measures.

The BOK's next monetary policy meeting is in January.

-Jihoon Lee/Reuters