Bank of Korea Holds Rate Steady After Back-to-Back Hikes

By Kwanwoo Jun

South Korea's central bank held its policy rate steady after two consecutive increases, pausing its tightening as inflation eased but remained above target.

The Bank of Korea on Thursday kept its benchmark seven-day repurchase rate at 3.00% after raising it in July and August. All 23 economists surveyed by The Wall Street Journal had expected no change, with most forecasting another increase in November.

The global artificial-intelligence boom and strong semiconductor exports continue to support economic growth. Policymakers are watching to see if those gains spill over into domestic demand and fuel inflation, strengthening the case for further rate increases.

South Korean exports accelerated in September, topping $120 billion for the first time, as semiconductor shipments more than tripled from a year earlier to a record high. The country is home to memory-chip makers Samsung Electronics and SK Hynix.

Headline inflation eased to 2.9% last month, while core inflation, which excludes volatile food and energy prices, edged down to 2.8%. Both remained above the BOK's 2% target.

BOK policymakers expect solid economic growth and above-target inflation to persist. They are also monitoring whether tensions in the Middle East add to cost pressures.

In a policy report earlier this month, the central bank said the timing and pace of further rate increases would depend on inflation, economic conditions and financial stability.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

October 21, 2026 21:08 ET (01:08 GMT)