War, weak growth, and policy uncertainty around Trump’s return already threaten the Korean economy. An extended political crisis will make things worse.

By bno - Taipei Bureau South Korea's central bank has opted to keep its benchmark interest rate unchanged at 3% despite mounting concerns over the country's economic performance. This decision follows two consecutive rate cuts in October and November,

South Korea's central bank Thursday held its benchmark policy rate at 3% in a surprise move, opting to assess changes in domestic and external economic conditions after having delivered two back-to-back cuts in its previous meetings.

Outlook: Investors are still not pricing in enough risks in emerging markets from the fallout of a new US-China trade war, writes Manik Narain of UBS. We have a busy day ahead with data releases and Wall Street earnings:

Despite mounting woes leading to weak growth momentum, South Korea's central bank kept its benchmark interest rate frozen Thursday in the wake of the weak local currency and uncertainties stemming from the new Donald Trump administration.

The surprise decision came as South Korea's trade-dependent economy faces challenges from weakening export growth and a sluggish recovery in domestic demand, partly hindered by political turmoil following impeached President Yoon Suk Yeol's short-lived declaration of martial law in December.

South Korea's acting President Choi Sang-mok said on Friday the government will make an all-out effort to stabilise the economy and will monitor financial markets around the clock to act if needed.

The U.S. secretary of state aimed to show that his country stood by South Korea as it grapples with a political crisis, and as Donald J. Trump returns to power.

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