Wire reporting: (Reuters, via CNA)

The Bank of Korea kept its benchmark policy rate at 3% on Thursday, leaving it unchanged after quarter-point increases at its July and August meetings^1,2.

The decision was expected. Economists surveyed ahead of the meeting had forecast a hold, according to both outlets^1,2.

CNBC reported that the decision came after President Lee Jae Myung had reportedly called for a broad effort to increase the country's housing supply¹.

Consumer prices rose 2.9% in September from a year earlier, down from 3.1% in August but still above the central bank's 2% target, according to Reuters². CNBC reported that inflation has been at or above that target for 13 months¹.

Governor Shin Hyun Song has said the bank prefers to tighten gradually and, at an International Monetary Fund event on Oct. 13, said policy would stay restrictive until inflation returns to target, Reuters reported².

Analysts at ING told CNBC that the pause likely does not end the cycle of rate increases, citing above-target inflation and steady growth¹. The analysts in the Reuters survey, at the median, expected a quarter-point increase to 3.25% at the November meeting².

Chip exports have been the main driver of growth. September exports rose a record 83.7% from a year earlier, and semiconductor shipments more than tripled, CNBC reported¹. The economy grew 3.8% in the first quarter and 3.7% in the second, and the IMF projects 3.3% growth for 2026, according to CNBC¹.

Sources

1. CNBCBank of Korea holds rates after President Lee calls for boosting housing supplyOct 21, 9:28 PM
2. (Reuters, via CNA)Bank of Korea holds rates after back-to-back hikesOct 21, 9:06 PM
3. ReutersBank of Korea holds rates as expected after back-to-back hikesOct 21, 10:00 PM

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