The Bank of Korea on Thursday raised its policy rate by 25bps to 3.00%, the
second consecutive hike, saying inflation remains above target and
financial-stability risks persist. The seven-member MPC voted to lift the 7-day
repo rate to 3.00%, the highest level since Feb 2025. A Reuters survey of 35
economists showed 18 had expected a hike. The central bank raised its forecast
for this year’s GDP growth to 3.3% from July’s 2.6% and kept this year’s
inflation forecast unchanged at 2.7%. Market medians currently price an
additional BOK hike in Q1 2027 followed by policy on hold at least through
end-2027. Daishin Securities economist Kong Dong-rak said he now sees a terminal
rate of 3.50% (previously 3.25%), citing the prospect of up to 3.5% economic
growth this year. Governor Shin will hold a press briefing at 10:10 Beijing
time.
