All surveyed economists expect a 25bp hike Thursday, with markets focusing on the governor’s guidance for future tightening steps.
The Bank of Korea is poised to raise its policy rate by 25 basis points at its Thursday meeting, as unanimous forecasts reflect expectations of further tightening. The move comes amid won depreciation and inflation exceeding the central bank’s target, prompting analysts to anticipate a hawkish stance without a fixed rate path commitment.
A Reuters survey showed 28 of 31 economists project the rate will reach 3.00% by year-end. HSBC cited won weakness, firm core inflation, and improved growth as key drivers, while Citigroup expects quarterly hikes through April 2025. Analysts remain divided on whether the next hike will come as soon as October or later.
FX markets are likely to react more to the governor’s comments on currency stability than the rate decision itself, as guidance on future tightening pace takes precedence.