Bank of Korea Gov. Shin Hyun-song holds up a gravel during the Monetary Policy Board meeting at the Bank of Korea in Jung District, central Seoul, on May 28. [JOINT PRESS CORP]
The Bank of Korea (BOK) left its benchmark rate unchanged at 2.5 percent on Thursday for the eighth meeting in a row, even as rising inflation and stronger-than-expected growth fueled speculation that a rate hike could come before the end of the year.
After cutting the rate by a cumulative 100 basis points from 3.5 percent beginning in October 2024, the central bank's Monetary Policy Board has held rates steady since July 2025.
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The decision to stand pat once again reflects the BOK's desire to monitor whether the secondary inflationary effects of high oil prices — prolonged by the fallout from the Iran war — continue to feed through to consumer prices. At the same time, the benefits of the semiconductor boom have yet to filter through to the broader domestic economy, with small businesses, self-employed workers and lower-income households continuing to struggle even as the technology sector thrives — a divergence that has complicated the rate decision.
