Bank of Korea Holds Benchmark Rate at 3.00%, Pausing After Back-to-Back Hikes; Governor Says Tight Stance Will Stay Until Inflation Converges to Target
SEOUL — The Bank of Korea (BOK) announced on October 22 that its Monetary Policy Board had voted to keep the benchmark seven-day repurchase rate unchanged at 3.00%. The decision was unanimous, according to The Wall Street Journal, and matched the expectations of all 23 economists surveyed by the Journal; all 34 analysts in a Reuters survey had also forecast no change.
The hold follows quarter-point hikes in July and August, which took the rate from 2.50% to 2.75% and then to 3.00%. The July and August moves were the central bank's first back-to-back increases in more than three years, Reuters reported. Governor Shin Hyun-song had previously said a gradual pace of tightening was preferred, and reiterated at an International Monetary Fund event on October 13 that policy would remain restrictive until inflation converges to its target.
Headline consumer inflation slowed to 2.9% in September from 3.1% in August, remaining above the bank's 2% target, while core inflation edged down to 2.8%. The BOK expects headline and core inflation to average 2.7% and 2.5% this year, in line with its August forecasts. On exports, shipments from January to September topped $800 billion for the first time, driven by global artificial-intelligence spending, according to Reuters; the Journal reported that September exports alone topped $120 billion for the first time, with semiconductor shipments more than tripling from a year earlier to a record high.
At a press conference after the meeting, Shin said the timing and pace of further rate increases would depend on incoming economic data, and that the central bank would maintain a tight policy stance until inflation converges toward its target. He said growth this year is expected to significantly exceed the August forecast of 3.3%, up from 2.6% in May, and that revised forecasts would be announced at the November meeting. According to Aju Press, Shin described the hold as the "fruit of proactive measures," referring back to his August remark that the bank had been able to prevent problems "with a hoe rather than a stick."
Analysts in the Reuters survey saw the BOK's terminal rate at 3.50%, pricing in one hike in November and another in the first quarter of 2027. The central bank is scheduled to release third-quarter GDP data next week.
Published by GSM · USA (original Chinese edition)
Photo: Wikimedia Commons · Otraff · CC BY-SA 3.0
- 2026-10-21Bank of Korea Holds Benchmark Rate at 3.00%, Pausing After Back-to-Back Hikes; Governor Says Tight Stance Will Stay Until Inflation Converges to TargetThis story
- 2026-10-22After the BOK Hold: KOSPI and KOSDAQ Fall More Than 3% as Governor Sees Inflation Reaching Target Only in 2027
