DBS Bank’s Group Research projects that the Bank of Korea (BOK) will keep its base rate unchanged at 2.50% throughout 2026. The report indicates that January inflation is expected to ease, reflecting subdued demand-side pressures and stable supply-side conditions. The BOK has signaled an end to its rate-cut cycle, aligning with the current economic outlook.

BOK monetary policy outlook

« The Bank of Korea has clearly signaled the end of its rate-cut cycle. Low inflation suggests there is no urgency for the BOK to shift from rate cuts to rate hikes. »

« We therefore maintain our forecast that the BOK will keep the base rate unchanged at 2.50% throughout this year. »

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)