Economists overwhelmingly expect a 25 basis point hike this week, with further tightening likely by year-end amid persistent inflation.
The Bank of Korea is poised to raise its benchmark interest rate by 25 basis points to 2.75% on Thursday, marking its first hike in over three years. The move aligns with regional trends as central banks respond to inflationary pressures driven by rising oil costs and currency depreciation.
A Reuters poll shows 36 of 37 economists anticipate the hike, with 28 forecasting another increase to 3.00% by year-end. Inflation hit a 2.5-year high of 3.2% in June, exceeding the BOK’s 2% target for the fourth consecutive month.
Markets will scrutinize the accompanying statement for clues on future policy, particularly amid a weakening won and expectations of sustained tightening into 2027.