The Bank of Korea left interest rates unchanged for a third straight meeting while reinforcing its message that persistent inflation means an additional hike is still possible.
The central bank kept its seven-day repurchase rate at 3.5% on Thursday as predicted by all 17 economists surveyed by Bloomberg News. Six of seven board members are open to the terminal rate reaching 3.75%. And while officials see inflation rising at a slower pace than their previous forecasts, their outlook still tops market expectations and core prices are seen hotter for 2023.
The central bank’s pause, while still leaving the door open to one more hike, shows officials are putting the fight against sticky prices ahead of supporting an economy under pressure amid a global slowdown. Prior to the BOK’s announcement, investors and many analysts were betting on rate cuts in Korea later this year, as risks to economic growth build.