Bank of Korea to Raise Benchmark Rate by 25bp on July 16, with Focus Shifting to Later Hikes

According to Yonhapinfomax, the Bank of Korea will raise its benchmark rate by 25 basis points on July 16, with analysts divided on future tightening. ING argues the policy rate should be 100bp higher immediately, citing negative rate buffers and persistent currency weakness, while Barclays expects no August hike but flags October-November as possible back-to-back moves if economic data surprises and inflation accelerates.

The market consensus projects around four total rate increases: two in 2026 and up to two in early 2027. However, uncertainty surrounding the won and oil prices has shifted focus from potential August tightening to potential consecutive hikes in the fourth quarter.