Overview
- Economists polled by Reuters overwhelmingly expect the Bank of Korea to leave the base rate at 2.50% at its May 28 meeting, with only a tiny minority calling for an immediate rise.
- The same poll showed a rapid shift in views this month, with a clear majority now forecasting at least one rate hike by the end of September.
- April consumer prices rose 2.6%, above the BOK’s 2.0% goal, a move economists link to oil trading mostly above $100 a barrel and to a weaker Korean won that lifts import costs.
- Strong first-quarter GDP growth of 1.7% and an expected upward revision to the central bank’s full-year growth forecast give the BOK scope to begin tightening policy without immediately harming growth.
- Many forecasters now see the policy rate near 3.00% by the end of 2026, a shift that could lift borrowing costs for households and firms and make the won and short-term interest rates more volatile.