The Bank of Korea raises its rate to 3.25% by year end
The test The Bank of Korea raises its base rate to 3.25% or higher at any decision, scheduled or not, announced between 26 Oct and 31 Dec 2026.
Not under way · Confidence: medium · Reviewed 25 Oct 2026 · Scores from 1 to 10
This page answers: What could happen, how it is scored, and who is exposed?
Using this page
- Read the two scores: Likelihood and Impact are kept apart.
- Check what is happening, each fact with its source.
- Use the calendar for the dates to watch.
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Impact is the average of the four parts, rounded, plus one point when Canada is directly hit on two or more channels, up to 10.
Two separate scales from 1 to 10. Strature never multiplies or merges them.
What changed
Dated, newest first
- Advance estimate of Q3 2026 GDP, 27 Oct: +1.0% q/q (BoK August forecast about 0.3%), +3.4% y/y; exports +2.3%, facility investment +4.1%, private consumption -0.2% q/q [9]
- Monetary Policy Board sets the base rate eight times a year [8]
- Held at 3.00% on 22 Oct 2026, unanimously; next decision 26 Nov; markets widely expect a rise; growth to beat 3.3% and 2.9%; 2027 CPI and core to exceed earlier 2.3% and 2.5% forecasts; current-account surplus US$279.2bn in Jan-Aug [1]
- CPI 2.9% y/y in September 2026 (3.1% August); core 2.8%; petroleum products +14.8%; fuel cap held CPI down 0.6 points [5]
Why it matters
The Bank of Korea raised its base rate in July and August 2026, to 3.00%, its first rises since January 2023. It held unanimously on 22 Oct and said its next move depends on third-quarter growth and October prices; growth, published on 27 Oct, came in at 1.0% on the quarter, against the 0.3% it had forecast in August. Markets widely expect a further rise at the last meeting of the year, on 26 Nov.
Why Likelihood 6 Pushes: two rises in a row; inflation above target until 2028; growth beating forecasts; markets widely expect 26 Nov. Brakes: unanimous hold on 22 Oct; the August plot allows a rise as late as Feb 2027; one decision in the window.
Why Impact 4 Key price: the base rate; threshold case 3.00% to 3.25%.
The other facts on file (4)
- Base rate raised 0.25 points to 2.75% in July 2026, the first rise since January 2023 [1] [3] (16 Jul 2026)
- Base rate raised 0.25 points to 3.00% on 27 Aug 2026 by 6-1; household debt above 2,000 trillion won (about US$1.44tn) in Q2 [2] (27 Aug 2026)
- August dot plot: 10 of 21 dots at 3.25% in six months, 6 at 3.5%, 5 at 3.0%; one more rise expected over four meetings [4] (27 Aug 2026)
- August forecasts: inflation 2.7% in 2026, 2.3% in 2027; 18 of 35 economists in a Reuters poll expected the August rise [7] (27 Aug 2026)
Where it sits
How it spreads
The Bank of Korea raises its base rate to 3.25% or higher at any decision, scheduled or not, announced between 26 Oct and 31 Dec 2026.
Not under wayChannels 4 on the card
- CanadaNo Canadian loss sourced; South Korean LNG demand at Kitimat unlikely to change (Strature's view).
- BorrowersRaises the cost of record household debt; delinquency among vulnerable borrowers could rise.
- HousingShin: rates alone cannot control house prices, but rises temper them.
- The won and bondsWider rate gap supports the won; yields rise (Strature's view).
Sectors 1
- Banks and insurers
Countries 1
- South Korea primary
Who is exposed
- Countries
- South Korea
- Sectors
- Banks and insurers
Three scenarios and their signposts
- S1
November rise
The Board raises to 3.25% on 26 Nov, as markets expect.
- S2
Wait for January
The Board holds again and points to early 2027, inside the six-month window of its August plot.
- S3
Peak reached
Growth or markets turn and the Board signals 3.00% is the peak.
| Path | Signpost |
|---|---|
| S1 | October CPI at or above 2.9% |
| S2 | Core inflation falling from 2.8% |
| S3 | Dissents for a cut, or changed guidance on 26 Nov 2026 |
No probability is given for the three paths.
Dates to watch
The dates to watch
A dot is a day, a bar a month or a year; a hollow mark is tentative. The line marks today.
- Nov 2026 October consumer prices, a named input [5] Tentative · Outside event
- 26 Nov 2026 Monetary Policy Board rate decision, last of 2026 [1] Declared · Window
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The other side
Savers and holders of won deposits earn more. A rise that keeps inflation expectations anchored while growth runs above forecast could let the Bank stop sooner and cut later (Strature's view).
Connected in Strature
- Can Canada become a material energy supplier beyond the United States?
- South Korea
- The Bank of England raises rates on energy inflation Shares a channel: Central banks tightening on energy-led inflation in the same window.
- The Fed raises rates again by March 2027 Shares a channel: Central banks tightening in the same window.
- The ECB raises rates a third time on energy inflation Shares a channel: Central banks tightening in the same window.
- South Korea's chip export boom turns into a fall Driven by: Chip-led growth lets the Bank tighten [1].
- The Strait of Hormuz shuts again Driven by: Petroleum prices up 14.8% on the year [5].
Sources
8 sources, numbered as the text cites them
- BOK keeps rate steady at 3%, but further hikes remain on table. The Korea Times · 22 Oct 2026 · News · confidence high · retrieved 25 Oct 2026
- BOK raises benchmark rate to 3% as inflation woes persist. The Korea Times · 27 Aug 2026 · News · confidence high · retrieved 25 Oct 2026
- BOK poised for rate hike Thursday as markets eye further tightening. The Korea Times · 13 Jul 2026 · News · confidence medium · retrieved 25 Oct 2026
- Bank of Korea raises base rate to 3.0% (Governor Shin's press conference). Kyunghyang Shinmun (English) · 27 Aug 2026 · News · confidence medium · retrieved 25 Oct 2026
- Consumer prices up 2.9% in September (Yonhap). Korea JoongAng Daily · 2 Oct 2026 · News · confidence high · retrieved 25 Oct 2026
- Bank of Korea (BOK) delivers second straight rate hike, lifts benchmark to 3.00%. investingLive · 27 Aug 2026 · News · confidence medium · retrieved 25 Oct 2026
- The Bank of Korea Base Rate. Bank of Korea · undated · Official · confidence high · retrieved 25 Oct 2026
- S. Korea's GDP expands 1% in Q3 on strong exports, investment: BOK. The Korea Herald · 27 Oct 2026 · News · confidence high · retrieved 27 Oct 2026
Reviewed 25 Oct 2026 · version 1 · last change: reviewed · All risks