Bank of Korea Finalizes Benchmark Rate Reform Plan

The Bank of Korea and Financial Services Commission finalized the benchmark rate reform plan, transitioning from CD-based rates to KOFR (Korea Overnight Financing Rate) as the primary risk-free overnight benchmark. The plan establishes new calculation methodologies, governance frameworks, and publication standards for reference interest rates in the Korean financial market.

Financial institutions, investors, and corporate borrowers with CD-linked contracts and financial products must prepare for the transition to KOFR-based pricing. Affected parties should review and revise existing contracts, update risk management systems, and conduct legal analysis of fallback provisions before the 2027 implementation date.