Bank of Korea holds rates after President Lee calls for boosting housing supply
Economists polled by Reuters had forecast the Bank of Korea to hold rates.
TL;DR
- The Bank of Korea (BOK) kept its policy rate unchanged at 3%.
- This decision follows two consecutive rate hikes.
- Analysts indicate the pause doesn't signal a change in policy stance due to persistent inflation.
- President Lee Jae Myung has called for an 'all out effort' to boost housing supply.
- The BOK is assessing the impact of prior rate hikes and monitoring domestic and external risk factors.
- Inflation in South Korea was 2.9% in September, staying above the BOK's 2% target for 13 months.
- Housing-related loans are increasing, and housing price growth in Seoul and surrounding areas is accelerating.
- One more rate hike is anticipated by some economists at the next BOK meeting.
- South Korea's economic growth is supported by exports, particularly semiconductors, which surged in September.
- The IMF projects South Korea's growth at 3.3% for 2026.