The Bank of Korea kept its policy rate at 3.00% after two earlier hikes, while retaining a tightening bias. It said 2026 and 2027 GDP growth should be “considerably higher” than its August projections of 3.3% and 2.9%, respectively, without issuing fresh figures, citing robust semiconductor exports and investment. Inflation forecasts were unchanged: headline inflation is still seen around 2.3% in 2026 and 2.5% in 2027, while core inflation is expected to firm in 2027 as cost pressures persist and domestic demand strengthens.
The central bank also expects stronger export-led activity to feed into household incomes and private consumption, widening the recovery and adding to underlying inflation pressures. It left scope for a 25bp hike in either November or December, with Q3 GDP, October inflation and November projections framed as key inputs. In foreign exchange, the hawkish tone has supported the won alongside a large current account surplus; USD/KRW was around 1,326, and the won has strengthened by nearly 17% against the dollar since end-June, with a near-term consolidation range seen at 1,300–1,350.
South Korea Semiconductor Exports and Current Account Surplus
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South Korea Semiconductor Export Growth Rate
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