Bank of Korea Opens for More Rate Hikes as Inflation to Persist at 5% Throughout 1H23

Rhee Chang yong, the Governor of the Bank of Korea, said inflation is probably to stay around 5% throughout the first half of next year, which would ensure more increases in interest rates from the central bank.

The governor has kept the door open for a continued monetary tightening, while analysts expect the base rate to peak at 3.50% in 1Q2023.

“Inflation in the 5% range could continue through the first half of next year,” Rhee said.

The bank’s expectancy increased among analysts for a 50 basis point hike in interest rates to 3.00% when the Bank of Korea reviews policy at its October 12 meeting.