Bank of Korea holds rates, upbeat outlook points to future hikes
TLT•The Bank of Korea held its benchmark rate at 3.00% and said growth and inflation next year are expected to exceed its previous forecasts. It said it would decide the timing and pace of future increases, while survey forecasts pointed to a hike to 3.25% in November.
1. Rate held steady
The Bank of Korea’s monetary policy board voted to keep its seven-day repurchase rate at 3.00%, as all 34 analysts surveyed had forecast. The bank said it would assess inflation, financial stability and domestic economic trends when deciding the timing and pace of future increases.
2. Outlook remains upbeat
The bank said growth this year and next year is expected to be considerably higher than its August forecasts of 3.3% and 2.9%, respectively, and that next year’s headline and core inflation will exceed its previous forecasts. It said Thursday’s pause was needed to assess external risks and the lagging effects of rate hikes in July and August.
3. Inflation and exports
Consumer inflation slowed to 2.9% in September from 3.1% in August, remaining above the bank’s 2% target. Exports were supported by global spending on artificial intelligence, with shipments from January to September exceeding $800 billion for the first time; median survey forecasts showed a November rate increase to 3.25%.
