<\/p>\n
It says the economic growth rate for South Korea is expected to \u2018considerably exceed\u2019 the bank\u2019s May forecast of 2.6%.<\/p>\n
South Korea\u2019s central bank raised its benchmark interest rate for the first time in 3.5 years on Thursday (Jul 16) and flagged more to come, as brisk growth in Asia\u2019s fourth-largest economy fanned inflation risks.<\/p>\n
The seven-member monetary policy board at the Bank of Korea (BOK) voted to raise the seven-day repurchase rate by 25 basis points to 2.75 per cent to stabilise a slumping won and counter persistent inflationary pressure.<\/p>\n
In a statement, the bank also said that the economic growth rate for South Korea is expected to \u201cconsiderably exceed\u201d the bank\u2019s May forecast of 2.6 per cent, while inflation will remain high for \u201ca considerable time.\u201d<\/p>\n
\u201cWith developments across all three areas \u2013 growth, inflation, and financial stability \u2013 supporting the need for an interest rate hike, it was judged appropriate to raise rates at this meeting,\u201d governor Shin Hyun-song said in a news conference in Seoul.<\/p>\n
\u201cUnlike major countries with weak economic recoveries, demand-side inflationary pressures are expected to gradually increase as the impact of the semiconductor boom spills over into domestic demand,\u201d he added.<\/p>\n
The dollar-won rate remained muted on the widely expected decision. The benchmark Kospi was off 6.2 per cent as of 0318 GMT (11.18 am in Singapore), mostly due to renewed selling in chipmakers\u2019 stocks. The three-year government bond yield edged down slightly to 3.862 per cent.<\/p>\n
The economy has been rebounding faster than expected in 2026, thanks to a boom in semiconductor exports and investment, even as the local currency remains pressured, with the won weakening 3.4 per cent against the greenback.<\/p>\n
Gross domestic product expanded 1.8 per cent in the first quarter, the fastest pace in nearly six years, prompting the government to raise growth forecasts to a five-year high of 3 per cent for 2026 on the back of a global semiconductor boom.<\/p>\n
\u201cShin was remarkably clear. Usually when officials say they are data-dependent, they speak in general terms, but he gave two specific indicators to watch \u2013 second-quarter GDP and July inflation data,\u201d said Ahn Jae-kyun, an analyst at Korea Investment Securities, who expects the BOK to raise rates again in the fourth quarter.<\/p>\n
\u201cBy clarifying exactly what to monitor and signalling that the door remains open for back-to-back hikes, those comments helped alleviate market uncertainty (about the policy path),\u201d Ahn added.<\/p>\n
With the headline inflation figure at a 2\u00bd-year high in South Korea, a majority of analysts see the BOK delivering at least one more rate hike before the end of 2026 to take the policy rate to 3 per cent.<\/p>\n
Median forecasts showed the BOK would raise its key rate to 3.25 per cent in the first quarter of 2027 and keep it there until at least the end of next year.\u00a0<\/span><\/p>\n <\/p>","protected":false},"excerpt":{"rendered":" It says the economic growth rate for South Korea is expected to \u2018considerably exceed\u2019 the bank\u2019s May forecast of 2.6%. South Korea\u2019s central bank raised its benchmark interest rate for the first time in 3.5 years on Thursday (Jul 16) and flagged more to come, as brisk growth in Asia\u2019s fourth-largest economy fanned inflation risks. […]<\/p>\n","protected":false},"author":1,"featured_media":6443,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-6442","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bez-rubriki"],"featured_image_src":{"landsacpe":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2026\/07\/Bank-of-Korea-33-875x445.webp",875,445,true],"list":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2026\/07\/Bank-of-Korea-33-463x348.webp",463,348,true],"medium":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2026\/07\/Bank-of-Korea-33-300x185.webp",300,185,true],"full":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2026\/07\/Bank-of-Korea-33.webp",875,539,false]},"_links":{"self":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/6442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/comments?post=6442"}],"version-history":[{"count":1,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/6442\/revisions"}],"predecessor-version":[{"id":6444,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/6442\/revisions\/6444"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media\/6443"}],"wp:attachment":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media?parent=6442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/categories?post=6442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/tags?post=6442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}