Bank of Korea holds base rate at 3.00% after two straight hikes in July and August
In short
The Bank of Korea's Monetary Policy Board kept the base rate at 3.00% on 22 October, pausing after raising it by 0.25 percentage point in each of July and August. Korean outlets said markets expected the hold and that a further hike, possibly on 26 November, remains likely.
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The Bank of Korea's Monetary Policy Board held the base rate at 3.00% on 22 October. The board met at the bank's main building in Seoul. Yonhap and other outlets described the outcome as in line with market expectations. [ 2 , 3 , 4 , 11 ]
The bank raised the rate by 0.25 percentage point in July and again in August, taking it from 2.50% to 2.75% and then 3.00%. Newsis said such back-to-back increases had not happened for 3 years and 7 months, since a run of seven straight increases from April 2022 to January 2023. Governor Shin Hyun-song (신현송) said after the August meeting that the effect of two consecutive increases needed to be checked, Newsis and Chosun Ilbo reported. [ 1 , 2 , 5 , 18 , 21 ]
Outlets gave several reasons for the pause. September consumer prices rose 2.9% from a year earlier, down from 3.1% in August, though still above the bank's 2% target. Newsis said core inflation fell to 2.8% from 3.4% as a telecom-fee base effect faded. The won, which Hankook Ilbo said had climbed above 1,500 per dollar in July, fell to the 1,320 range. Hankook Ilbo and CBS NoCut News also cited the burden on borrowers, with CBS NoCut News noting household debt above 2,000 trillion won. [ 1 , 4 , 9 , 21 ]
Most outlets said tightening is not over. Chosun Ilbo said the bank's price-stability goal is under pressure from higher oil prices linked to the Middle East war, while a semiconductor-driven export surge has led to upward revisions of growth forecasts. The bank raised its 2026 growth forecast in August from 2.6% to 3.3%. Newsis quoted Shin as expecting price rises driven by demand-side factors, and Hankook Ilbo said Seoul apartment prices have risen for 88 straight weeks. [ 1 , 4 , 8 , 9 ]
Seoul Economic Daily reported that 19 of 20 economists and financial experts it surveyed on 18 October expected a hold in October and 18 of 20 expected a hike in November. Dong-A Ilbo and Maeil Business called the decision a 'hawkish hold', and said financial circles expect a possible hike at the 26 November meeting, the last of the year. Hankook Ilbo said markets saw a path to a final rate of 3.75%. [ 9 , 10 , 18 , 22 ]
Kyunghyang Shinmun said the third-quarter GDP advance estimate due on 27 October, the October consumer price data due on 2 November and the US Federal Open Market Committee decision on 28 October could affect future decisions. Governor Shin was due to hold a news conference at 11:10. [ 2 , 8 , 22 ]
Why it matters
The decision pauses a tightening cycle that outlets say is not over, with inflation still above the 2% target. Analysts quoted by the outlets are watching upcoming data and the 26 November meeting for the next move.
Key facts
- The Bank of Korea's Monetary Policy Board held the base rate at 3.00% on 22 October. [ 2 , 3 , 4 , 8 , 11 ]
- The bank raised the rate by 0.25 percentage point in July and again in August, taking it from 2.50% to 3.00%. [ 2 , 8 , 18 , 21 ]
- Consumer prices rose 2.9% in September from a year earlier, down from 3.1% in August and above the bank's 2% target. [ 1 , 4 , 9 ]
- The next and last rate-setting meeting of the year is on 26 November. [ 2 , 9 , 18 , 22 ]
- Governor Shin Hyun-song (신현송) was due to hold a news conference at 11:10. [ 8 , 22 ]
- The bank raised its 2026 growth forecast in August from 2.6% to 3.3%. [ 4 , 8 ]
Confirmed by several sources
- The Bank of Korea kept its base rate at 3.00% on 22 October. [ 2 , 3 , 4 , 6 , 7 , 8 , 10 , 11 ]
- The hold follows 0.25-point increases in July and August. [ 2 , 8 , 9 , 18 ]
- The hold was widely expected by markets and surveyed experts. [ 9 , 10 , 11 , 18 , 20 , 22 ]
- Outlets reported that a further hike is considered likely, with 26 November the next meeting. [ 9 , 10 , 18 , 22 ]
- September consumer price inflation was 2.9% year on year, down from 3.1% in August. [ 1 , 4 , 9 , 17 ]
Still unclear
- Whether Governor Shin signalled a November hike at his news conference. Documents written before the 11:10 news conference only say it was due to take place; Korea Economic Daily said it was watching whether he would hint at a November increase.
- The size and path of further rate increases. Hankook Ilbo said markets saw a path to a 3.75% final rate through hikes in November, February and May, while a Samsung Securities researcher said the size of further hikes could be smaller than previously expected.