South Korea's inflation rate increased to 1.5% year-on-year in November, up from 1.3% in October, but fell short of economists' forecast of 1.7%. The rise in inflation comes at a time when the Korean won is weakening and exports are slowing.

In response to economic pressures, the Bank of Korea unexpectedly cut its benchmark interest rate by 25 basis points to 3%, marking the first consecutive rate cuts since 2009. The rate reduction is aimed at mitigating downside risks to the economy, which narrowly avoided a technical recession with a GDP growth of 0.1% in the third quarter, following a contraction of 0.2% in the second quarter.

The central bank also revised its inflation outlook for 2024 and 2025, lowering projections to 2.3% and 1.9% respectively, from previous estimates of 2.5% and 2.1%. Factors influencing future inflation include exchange rate fluctuations, global oil prices, domestic and international economic growth, and adjustments in public utility fees. The Korean won has weakened against the U.S. dollar, reaching a two-year high of 1,411.31, due to concerns about tariffs under the incoming Trump administration.