South Korea‘s central bank held interest rates steady on Thursday, as policymakers steered a cautious path amid concerns about financial stability risks stemming from rising household debt and economic pressure from U.S. tariffs.

The Bank of Korea’s seven-member monetary policy board voted to keep its benchmark interest rate unchanged at 2.50%, an outcome expected by all 33 economists in a Reuters poll.

Concerns of financial stability risks in Asia’s fourth-largest economy have grown in recent months, driven by home prices and household debt rising sharply on lower interest rates, prompting policymakers to introduce stricter mortgage rules.

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Economists expect the central bank, which has lowered interest rates by a cumulative 100 basis points in the current easing cycle that started in October, to deliver at least one more rate cut of 25 basis points this year to underpin the economic recovery.

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The government last week adopted a second supplementary budget for the year with a cash handout scheme to boost domestic demand, as President Lee Jae Myung, who took office on June 4, prioritises shoring up an economy grappling with trade risks and tepid consumption.

Earlier this week, U.S. President Donald Trump ramped up the trade war he launched this year, telling partners, from powerhouse exporters such as Japan and South Korea to minor players, that they will face high tariffs from August 1.

Governor Rhee Chang-yong will hold a press conference at 0210 GMT, which will be livestreamed via YouTube.

South Korea’s former president, Yoon Suk-yeol, has been arrested for a second time and returned to a solitary jail cell over his ill-fated attempt to impose martial law last December.

Yoon’s detention on Thursday came after a court in the South Korean capital, Seoul, ordered his arrest, citing concerns the former leader could seek to destroy evidence.

The 64-year-old politician, who is on trial for insurrection, is being held at the Seoul Detention Center, where he spent 52 days earlier in the year before being released four months ago on technical grounds.

Yoon plunged South Korea into a political crisis when he sought to subvert civilian government on December 3, sending armed soldiers to parliament in a bid to prevent lawmakers from voting down his declaration of martial law.

He became South Korea’s first sitting president to be taken into custody when he was detained in a dawn raid in January, after spending weeks resisting arrest, using his presidential security detail to head off investigators.

But he was released on procedural grounds in March.

South Korea’s Constitutional Court then removed Yoon from office in April, paving the way for a snap election, which was held in June.

The country’s new president, Lee Jae Myung, approved legislation launching sweeping special investigations into Yoon’s push for martial law and various criminal accusations tied to his administration and wife.

Earlier this month, the special counsel questioned Yoon about his resistance during a failed arrest attempt in January, as well as accusations that he authorised drone flights to Pyongyang to help justify declaring martial law.

Yoon has defended his martial law decision as necessary to “root out” pro-North Korean and “antistate” forces.

The latest arrest warrant against Yoon authorises his detention for up to 20 days, as prosecutors prepare to formally indict him, including on additional charges.

“Once Yoon is indicted, he could remain detained for up to six months following indictment,” Yun Bok-nam, the president of Lawyers for a Democratic Society, told the AFP news agency.

“Theoretically, immediate release is possible, but in this case, the special counsel has argued that the risk of evidence destruction remains high, and that the charges are already substantially supported.”

During a hearing on the arrest warrant on Wednesday, Yoon’s legal team criticised the detention request as unreasonable, stressing that Yoon has been ousted and “no longer holds any authority”.

The former president also spoke at the seven-hour hearing, saying he is now “fighting alone”, according to South Korean media.

“The special counsel is now going after even my defence lawyers,” Yoon complained. “One by one, my lawyers are stepping away, and I may soon have to fight this alone.”

Meanwhile, Yoon’s lawyers said that the former leader would not attend the 10th hearing of his insurrection trial on Thursday following his arrest.

Citing health concerns, Yoon’s lawyers submitted a written reason for his absence to the court shortly before the hearing was scheduled to begin, according to South Korea’s official Yonhap news agency.

His lawyers, however, attended in his place, the agency said.

If convicted, Yoon could face a maximum penalty of life in prison or death.

Former South Korean President Yoon Suk Yeol is back in a solitary cell after a court approved a new arrest warrant. He is facing an investigation over his declaration of martial law last year.

South Korea’s disgraced ex-President Yoon Suk-yeol returned to prison on Thursday as prosecutors investigate accusations of insurrection after he declared martial law last December.

He is being held in a solitary cell at the Seoul Detention Center, where he spent 52 days earlier in the year before his release four months ago on technical grounds.

The Seoul Central District Court said it approved a second warrant because of concerns Yoon could seek to destroy evidence.

What is Yoon accused of?

Yoon triggered months of political turmoil in South Korea after declaring martial law in early December, and then sending armed soldiers to parliament in an attempt to stop lawmakers from voting down his decree.

He has also faced accusations that he authorized drone flights to the North Korean capital, Pyongyang, to help justify his declaration, as well as of falsifying official documents relating to it.

Yoon, 64, has said his decision to declare martial law was necessary to “root out” pro-North Korean and “anti-state” forces.

But the Constitutional Court, which confirmed Yoon’s impeachment on April 4, said his acts were a “betrayal of people’s trust” and “denial of the principles of democracy.”

Life sentence possible

In January, he was detained in a dawn raid after weeks of resisting arrest, becoming the country’s first sitting president to be taken into custody, but was released on procedural grounds in March.

His present detention comes after he on Wednesday attended a warrant hearing that lasted about seven hours during which he rejected all charges.

At the hearing, Yoon’s legal team described the detention request by prosecutors as unreasonable and claimed that the ex-leader “no longer holds any authority” after his impeachment.

Yoon faces criminal charges of insurrection over his martial law decree, which could carry a sentence of life in prison or death.

Although South Korea still has capital punishment on the books, it has had a de facto moratorium on executions since 1998. At the same time, several dozen people are still technically on death row.

Edited by: Elizabeth Schumacher

10th July 2025 – (Seoul) Former South Korean President Yoon Suk Yeol faced a legal setback as a South Korean court early Thursday granted a new arrest warrant related to his brief imposition of martial law in December. The Seoul Central District Court agreed with the special prosecutor’s assertion that Yoon posed a risk of tampering with evidence, leading to his return to custody after being released in March. Initially, the court had overturned his January arrest, permitting him to stand trial for rebellion without being detained.

Yoon, who was ousted from office in April and faces charges of insurrection over the martial law decree, is now confronted with additional allegations including abuse of power and obstruction of official duties. The court’s decision came after Yoon’s recent defiance towards a special counsel’s investigations into his authoritarian actions.

During a lengthy hearing on Wednesday, Yoon adamantly refuted all charges before being escorted to a detention centre near Seoul. Following the court’s ruling, he was placed in a solitary cell at the facility, where he can be held for up to 20 days as prosecutors prepare to formally indict him on the new charges, potentially extending his custody to six months pending an initial court ruling.

Yoon’s legal team criticised the detention request, highlighting his ousted status and lack of authority. Despite his impeachment being upheld by the Constitutional Court in April, Yoon’s steadfast defence of his martial law attempt as essential to combat “anti-state” forces has been met with strong opposition.