Bank of Korea Holds Rate, Raises Inflation Forecast

Central bank signals rates may stay high longer amid persistent inflation risks, despite expectations of policy easing next year.

South Korea's central bank, the Bank of Korea (BOK), held its key policy rate at 3.50% at a policy review meeting in Seoul.
The BOK has upgraded next year's inflation forecast to 2.6% from 2.4%, while cutting its projections for economic growth to 2.1% from 2.2%.
The bank has signaled it may need to keep interest rates higher for longer to head off persistent inflation risks.
Consumer inflation accelerated for a third month in October amid higher food costs, far above the BOK's target rate of 2%.
Most economists see the BOK as having reached its peak rate and expect it to start easing policy from the third quarter of next year as cooling inflation makes restrictive borrowing costs difficult to justify to the public.