HSBC economist Jin Choi says markets broadly expect the Bank of Korea to deliver
a preemptive 25 bps hike this week. Despite easing localized Middle East
tensions and stable oil, the won faces depreciation pressure, core inflation
remains firm and Korea’s growth outlook has improved — factors Jin says justify
acting now rather than waiting for oil‑driven disinflation. He warns AI‑led
export strength could pass through to wages, capex and fiscal channels, boosting
domestic demand and demand‑driven inflation and prompting a deeper hiking cycle.
HSBC expects an additional 25 bps in Q4 after this week’s move and sees upside
risk to further hikes in 2027.
