Governor Shin Hyun Song signals a likely hike at next week’s meeting as June inflation hits a 2.5-year high.
Bank of Korea Governor Shin Hyun Song indicated Thursday that policy rates will likely rise at next week’s meeting, citing inflation at its highest level in two and a half years. June’s inflation print accelerated above target, reinforcing the case for tighter monetary policy.
Markets had anticipated a hold, but Shin’s remarks shifted expectations toward a hike. The won’s muted reaction suggests partial pricing of the move, though his comments on potential currency appreciation could add upward pressure. Financial stability risks and coordination with other central banks further support the case for action.
The BOK’s decision next Thursday will hinge on balancing inflation control with broader economic conditions. Analysts now see a hike as the most probable outcome.