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Seoul, Oktober 24, 2026 – The Bank of Korea (BOK) opted to keep its benchmark interest rate unchanged at 3% on October 22, pausing after two consecutive hikes earlier this year.
The decision underscores the central bank’s cautious approach as it balances persistent inflationary pressures with signs of resilience in South Korea’s export-driven economy.
Governor Shin Hyun Song emphasized that monetary policy will remain restrictive until inflation aligns with the 2% target.
September’s consumer price index eased slightly to 2.9% from 3.1% in August, but the figure remains above the bank’s comfort zone.
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“We will continue to monitor inflationary persistence and act if necessary,” Shin said, signaling that further tightening remains on the table.
The pause follows quarter-point increases in July and August, marking the first back to back hikes in more than three years.
Analysts note that the decision reflects both confidence in the economy’s underlying strength and caution over financial market volatility.
Kang Seung won of NH Investment & Securities observed that recent equity market swings made aggressive tightening less feasible, and the pause helps moderate the pace of policy adjustment.
Exports have provided a crucial buffer. Shipments from January to September surpassed US$800 billion, fueled by global demand for semiconductors and Ai related products.
This robust performance has supported growth, giving policymakers room to maintain a restrictive stance without derailing momentum.
Market expectations remain tilted toward another hike.
A Reuters survey of 34 economists unanimously predicted the hold, but the median forecast points to a rate increase to 3.25% in November.
Such a move would reinforce the BOK’s commitment to curbing inflation while acknowledging the strength of South Korea’s external sector.
The central bank’s decision highlights the delicate balance between domestic price stability and external competitiveness.
While inflation remains stubbornly above target, South Korea’s export surge offers policymakers a cushion to navigate global uncertainties.
The BOK’s forward guidance leaves the door open for further tightening, underscoring its vigilance against inflationary risks even as growth remains resilient.
