Bank of Korea Expected to Hold Steady on Oct 22, May Hike Again in November
nashnova research
A Reuters poll of 34 economists expects the Bank of Korea to hold its benchmark rate at 3.00% on October 22, pausing after two consecutive hikes — but most see a 25-bp increase in November, with the rate path potentially peaking at 3.50%.
Why pause now instead of hiking again?
Governor Shin Hyun-song has publicly called for time to assess the impact of two back-to-back rate hikes. This means → the pause is not a pivot; it is a diagnostic stop to check whether the medicine is working.
All 34 economists polled by Reuters expect the seven-day repo rate to stay at 3.00% on October 22.
In plain terms = the BOK does not believe inflation is under control — it just wants to confirm the previous hikes are taking effect before adding more.
Inflation has eased — why is the BOK still uneasy?
September CPI came in at 2.9% year-on-year, down from 3.1% in August — but still well above the BOK's 2% target.
Three forces keep pushing prices higher: semiconductor-export-driven economic growth, recovering domestic demand, and elevated energy costs.
The poll forecasts average inflation of 2.7% this year, easing to 2.2% only in 2027. This means → returning to target is still more than a year away, giving the BOK no reason to ease off.
Will November bring a hike? What comes after?
Most polled economists expect a 25-bp hike in November to 3.25%, in line with the BOK's own dot plot — the central bank's published forecast of where rates are heading.
BNP Paribas senior economist Yoon Ji-ho said: "The BOK will buy time, but the hiking cycle is not over. Semiconductor-driven strength will spill into the domestic sector, and inflation risks tilt to the upside."
The poll's median forecast: the benchmark rate rises to 3.50% by Q1 2027 and holds there for the full year — 25 bp higher than the previous survey round.
Beyond inflation, what else is the BOK watching?
Financial stability is a parallel concern: home prices are still rising, and mortgage growth — while slowing — has not slowed enough to prove that rate hikes are biting.
The KOSPI hit a six-month low this week and triggered the circuit breaker for the tenth time this year, underscoring rising market volatility.
Société Générale economist Michelle Lin noted that a sustained stock-market correction could slow the BOK's tightening pace. In plain terms = if markets crack on their own, the central bank's case for further hikes weakens.
What is the next data point to watch?
Korea's economy grew 0.6% quarter-on-quarter and 3.7% year-on-year in Q2; the poll forecasts full-year growth of 3.5%.
Q3 GDP data, due next week, is the key test of whether export-led recovery is broadening into domestic demand.
This reflects the market's real question: is semiconductor-export growth a single plank or a foundation for the broader economy — and the answer will directly shape the BOK's resolve to keep hiking.
市场有风险，内容仅供研究参考，不构成投资建议。