Economists expect Bank of Korea to hold rate at 3.00% on Oct 22, then raise in November
In short
Economists surveyed by Yonhap, Asia Economy, Seoul Economic Daily and Chosun Biz mostly expect the Bank of Korea to keep its base rate at 3.00% at its Oct 22 meeting, after 0.25-point hikes in July and August. Most also expect another hike in November.
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Economists expect the Bank of Korea's Monetary Policy Board to keep the base rate at 3.00% when it meets on Oct 22, according to surveys published by Yonhap, Asia Economy, Seoul Economic Daily and Chosun Biz. The bank raised the rate by 0.25 percentage points in July and again in August. Newsis reported that the two consecutive hikes were the first back-to-back increase in 3 years and 7 months, since seven in a row between April 2022 and January 2023. [ 1 , 2 , 3 , 4 , 5 ]
All six economists in Yonhap's survey and all 10 securities-firm experts who spoke to Chosun Biz expected a hold. Asia Economy, which polled 13 economists on Oct 13-16, found 12 (92.3%) expecting the rate to stay at 3.00%. Seoul Economic Daily reported that 19 of 20 professors and financial experts it surveyed expected a hold. [ 1 , 3 , 4 , 5 ]
The economists said the bank needs time to check the effect of the two hikes. They pointed to September consumer price inflation of 2.9%, down from 3.1% in August, and core inflation of 2.8%, down from 3.4%. Chosun Ilbo reported the won-dollar rate closed at 1,330.3 on Oct 19, 53 won below the previous month's level. Governor Shin Hyun-song told a parliamentary audit on Oct 12 that the bank had bought time with its hikes, that rising rates hit vulnerable borrowers hardest, and that it would decide the timing and pace of further hikes while watching prices, the economy and financial stability. [ 1 , 2 , 3 , 5 ]
Most also expect another hike in November. All six in Yonhap's survey expected one after the third-quarter GDP figure is published this month. All 12 Asia Economy respondents who expected a hold named November, and 18 of the 20 experts in Seoul Economic Daily's survey did. All 10 in Chosun Biz's survey expected a 0.25-point hike to 3.25%, citing high oil prices and rising pay at major chip companies. Yonhap's economists also cited inflation above the bank's 2% target and an unsettled property market. [ 1 , 3 , 4 , 5 ]
Views differ on where the cycle ends. Three of Yonhap's six economists said a final rate of 3.75% should not be ruled out. Asia Economy reported that most respondents saw 3.50%, with some at 3.75%. All 10 in Chosun Biz's survey expected 3.5% at the end of next year, and seven of them expected a first-quarter hike after November. [ 1 , 3 , 5 ]
On the vote, 6 of Asia Economy's 12 hold-forecasters expected a unanimous decision and 4 expected a dissent in favor of a hike, most often by one member, Jang Yong-seong. In Chosun Biz's survey 4 of 10 expected unanimity and 6 expected one dissent. Han Jun-hee of NH Financial Research Institute expected a hike in October. A Hana Securities researcher quoted by Newsis said an October hold would be a slowing of pace and not a signal that the hiking cycle is ending. [ 2 , 3 , 5 ]
Why it matters
The Oct 22 meeting is the first since two consecutive hikes, and the outlets frame a hold as a pause to check their effect rather than the end of tightening. Economists quoted in the surveys disagree on how high the rate will finally go.
Key facts
- The Bank of Korea's Monetary Policy Board is due to decide the base rate on Oct 22; the rate is currently 3.00%. [ 1 , 2 , 5 ]
- The bank raised the rate by 0.25 percentage points in each of July and August. [ 2 , 5 ]
- All 6 economists in Yonhap's survey and all 10 in Chosun Biz's survey expect a hold in October; Asia Economy found 12 of 13 and Seoul Economic Daily 19 of 20. [ 1 , 3 , 4 , 5 ]
- September consumer price inflation was 2.9% year on year, down from 3.1% in August; core inflation was 2.8%, down from 3.4%. [ 2 , 5 ]
- All 6 economists in Yonhap's survey, all 12 hold-forecasters in Asia Economy's, 18 of 20 in Seoul Economic Daily's and all 10 in Chosun Biz's expect a hike in November. [ 1 , 3 , 4 , 5 ]
- Governor Shin Hyun-song told a parliamentary audit on Oct 12 that the bank would decide the timing and pace of further hikes while checking prices, the economy and financial stability. [ 1 ]
Confirmed by several sources
- Economists surveyed by four outlets mostly expect the Bank of Korea to hold its base rate at 3.00% on Oct 22. [ 1 , 3 , 4 , 5 ]
- The bank raised its base rate by 0.25 percentage points in July and again in August. [ 2 , 5 ]
- September consumer inflation was 2.9% and core inflation 2.8%, both lower than in August. [ 2 , 5 ]
- Most surveyed economists expect the next hike in November. [ 1 , 3 , 4 , 5 ]
Still unclear
- Whether the Oct 22 decision will be unanimous. In Asia Economy's survey 6 of the 12 hold-forecasters expected a unanimous hold and 4 expected a dissent for a hike; in Chosun Biz's survey 4 of 10 expected a unanimous hold and 6 expected one dissent.
- How high the rate will go in this cycle. Three of Yonhap's six economists said a final rate of 3.75% should not be ruled out; Asia Economy said most expected 3.50% with some at 3.75%; all 10 in Chosun Biz's survey expected 3.5% at the end of next year.
- Whether the bank will raise in October after all. Asia Economy reported that one of its 13 respondents, Han Jun-hee of NH Financial Research Institute, expected a hike this month; no other document names an October hike forecaster.
What local media are saying
Timeline, local time
- On Oct 18 Yonhap published a survey of six economists who all expected a hold on Oct 22. [ 1 ]
- On Oct 18 Newsis reported that a hold followed by a November hike was the prevailing outlook. [ 2 ]
- On Oct 18 Asia Economy published a survey of 13 economists, 12 of whom expected a hold. [ 3 ]
- On Oct 19 Seoul Economic Daily reported that 19 of 20 experts surveyed expected a hold and 18 a November hike. [ 4 ]
- On Oct 20 Chosun Ilbo published a survey of 10 experts, all expecting a hold in October and a hike to 3.25% in November. [ 5 ]