Korea: July BOK Hike and Back-to-Back Hike Chance

The Bank of Korea is expected to hike rates by 25bp in July 2026, with further tightening likely delayed until October. Strong economic momentum and inflation concerns support this outlook, alongside positive tailwinds for the KRW.

Key Takeaways

• 1.The Bank of Korea (BOK) is widely expected to hike its policy rate by 25bp to 2.75% on 16 July 2026.
• 2.Market focus will shift to BOK guidance on terminal rates and the timing of the next hike, with a follow-up rate hike expected in October rather than August.
• 3.The KRW is expected to be supported by ADR listings, moderating foreign equity outflows, and proactive FX monitoring.

Table of Contents

• Korea: July BOK hike and back-to-back hike chance?
• BOK to hike by 25bp and flag further tightening
• Focusing on inflation
• Recent publications
• BOK to hike due to inflation concerns
• Signs of inflation
• Strong growth to withstand rate hikes
• Economic activities are improving
• Strong IT exports support exports and GDP growth
• Financial stability risks supportive of monetary tightening
• Housing prices continue to rise
• Elevated USD/KRW level impacts import prices
• Eyes on hints for next moves; October rate hike expected
• More supports for the KRW

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