Inflation Rebound Keeps South Korea's Central Bank on Track for July Rate Hike

Deep News07-02 07:30

According to economic analysis, inflation accelerated further in June, exceeding the central bank's 2% target. This indicates that high oil prices are now being passed through to consumer prices.

The inflation figures have increased the necessity for the central bank to tighten monetary policy, aiming to prevent inflation from becoming entrenched over the long term.

The central bank is expected to commence its tightening cycle on July 16 with an initial interest rate increase of 25 basis points.

This is projected to be followed by another 25 basis point hike in October, with two additional hikes next year. This path would raise the policy rate from the current 2.5% to 3.5% by the first half of 2027.

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