However, the central bank said the degree of restrictiveness has lessened significantly this year with a sharp fall of interest rates in local financial markets.
Volatility in the won has risen above its long-term average since early last year following the Fed's interest rate hikes and exceeded that of most other currencies since August by a significant degree, the report said.
Domestic factors such as trade deficits have recently fuelled the increased volatility, it said.
The won has weakened by 3 per cent against the US dollar so far this year, following a 6 per cent drop in 2022, when the South Korean currency once touched its lowest level in 14 years. That compares with the US Dollar index's gains of 0.4 per cent and 8.2 per cent so far this year and in 2022, respectively.
The BOK said uncertainty was still high over how fast inflation would ease, citing core prices that were stickier in downward direction and delayed public utility price hikes.
The real estate market remains overvalued, the central bank said, adding that a declining trend in house prices softened this year, with a rebound in mortgage loans on loosened regulations.
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