Base Rate held at 3.00 percent as further increases remain planned
All seven Bank of Korea (BOK) Monetary Policy Board members voted to hold the Base Rate at 3.00 percent on October 22, 2026. Inflation near 3 percent and financial stability risks persisted, while external uncertainties increased.
Two increases under review
The Board held rates after two prior increases to assess their effects and domestic and external risks, including Middle East tensions and major economies' monetary and fiscal policies.
Exports and investment sustained strong growth; services supported moderate employment gains.
AI investment supported global growth, while energy costs and supply constraints kept inflation elevated.
Global bond yields and the dollar rose.
A large current account surplus strengthened the won despite dollar gains.
Korean bond yields rose before largely reversing; semiconductor profitability concerns lowered stocks.
Household lending declined on other-loan repayments, but housing loans grew and home-price growth accelerated in Seoul and surrounding areas.
Growth exceeds August projections
The BOK projects 2026 and 2027 growth well above August forecasts of 3.3 and 2.9 percent, respectively.
September headline and core inflation were 2.9 and 2.8 percent; public short-term expectations stayed in the upper 2 percent range.
It sees 2026 headline and core inflation near August forecasts of 2.7 and 2.5 percent, but 2027 rates above prior forecasts of 2.3 and 2.5 percent.
Oil, exchange rates, domestic demand and wage growth cloud the outlook.
Cost pass-through and strengthening demand are projected to keep inflation above target for a considerable time.
A pause before further increases
The Board retains further rate increases as its stated policy direction.
It will decide their timing and pace based on inflation, growth and financial stability.
Housing imbalances around Seoul and household debt remain explicit concerns in its policy assessment.
Source: ★Monetary Policy Decision (October 22, 2026)
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