Bank of Korea holds rates after back-to-back hikes
TLT•The Bank of Korea kept its benchmark rate at 3.00% after quarter-point hikes in July and August. September inflation was 2.9%, above the bank’s 2% target, and analysts’ median forecast pointed to a rate increase to 3.25% in November.
1. Rate decision
The Bank of Korea’s seven-member monetary policy board voted to keep the seven-day repurchase rate at 3.00%. All 34 analysts surveyed had forecast no change.
2. Inflation and growth
The decision followed quarter-point increases in July and August, the bank’s first consecutive hikes in more than three years. Headline inflation slowed to 2.9% in September from 3.1% in August, remaining above the 2% target. Exports were supported by global spending on artificial intelligence, with shipments from January to September topping $800 billion for the first time.
3. November outlook
The survey’s median forecast was for the base rate to rise to 3.25% at the November meeting, in line with the bank’s dot plot projection. Governor Shin Hyun Song has said policy will remain restrictive until inflation converges with its target.
