BOK Seen Holding Rates Steady Ahead of Decision, With Focus on November Hike Signal

All six economists surveyed by Yonhap News expect the Bank of Korea to keep its benchmark interest rate unchanged at 3.00%. The view is that policymakers will assess the impact of earlier increases rather than deliver a third straight hike after moves in July and August.

For the path after a pause, growth momentum and inflation pressures will both need to be taken into account. Vice Prime Minister and Finance Minister Lee Hyoung-il said on October 16 that this year’s real gross domestic product growth could reach as high as 3.6%. That is above the Bank of Korea’s August forecast of 3.3%. The current-account surplus for January through August also reached $279.2 billion, about four times the level recorded a year earlier.

Rising oil prices and household debt were also cited as factors that could support another rate increase. Brent crude came close to $112 a barrel during trading on October 20. Household loans at South Korea’s five biggest banks stood at 783.5983 trillion won as of October 15, up 2.7643 trillion won from the end of September. The balance fell by 1.2852 trillion won last month, but turned higher again this month.

The won strengthened against the dollar. It fell to 1,322.8 won per dollar during the previous session, the lowest intraday level since October 2, 2024, based on intraday lows. Dollar selling by exporters contributed to the move.

BOK Governor Shin Hyun-song is scheduled to hold a press briefing at about 11:10 a.m. on Wednesday to explain the background to the rate decision and the direction of future monetary policy.