BOK hikes rates for first time in 3-1/2 years, signals more

"(Shin) was remarkably clear. Usually when officials say they are data-dependent, they speak in general terms, but he gave two specific indicators to watch -- second quarter GDP and July inflation data," said Ahn Jae-kyun, an analyst at Korea Investment Securities, who expects the BOK to raise rates again in the fourth quarter.

"By clarifying exactly what to monitor and signaling that the door remains open for back-to-back hikes, those comments helped alleviate market uncertainty (about the policy path)."

The rate hike aligns the BOK closely with the central bank in neighbouring Japan, which recently raised its own benchmark rate to a 31-year high.

Central banks in Australia, New Zealand, Indonesia and the Philippines have already tightened their monetary policies.

With the headline inflation figure at a 2-1/2-year high in South Korea, a majority of analysts see the BOK delivering at least one more rate hike before the end of this year to take the policy rate to 3.00%.