Bank of Korea Poised for October Rate Pause Before November Hike
Economists expect the Bank of Korea to hold interest rates at 3.00% on October 22, with a 25-basis-point increase likely to follow in November.
POLICY WIRE — Seoul, South Korea — The Bank of Korea is widely anticipated to maintain its benchmark interest rate at 3.00% during the upcoming Monetary Policy Board meeting on October 22. Financial experts suggest the central bank will opt for a pause following consecutive rate increases in July and August.
A survey of 34 economists conducted by Reuters indicates a unanimous expectation for a hold this week. However, the consensus forecast points toward a 25-basis-point hike arriving in November as the bank continues to navigate persistent inflation and global economic pressures.
Additional data from a Seoul Economic Daily survey of 20 experts reinforces this outlook, with all participants predicting a move to 3.25% by next month. Projections from Morgan Stanley and a separate Yonhapinfomax poll of 15 financial analysts also align with the expectation of a steady rate this week.
While market analysts largely anticipate a unanimous decision to hold, some observers note the possibility of a single dissenting vote from a committee member favoring an immediate increase. The central bank remains caught between the need to evaluate the impact of previous tightening and the potential for further aggressive action from the U.S. Federal Reserve.
Despite consumer inflation easing to 2.9%, the Bank of Korea is expected to maintain a hawkish stance. Experts surveyed suggest the base rate could reach 3.5% by the end of next year as the committee balances firm growth with the necessity of cooling price pressures.
Reporting by Policy-Wire (PW)
