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.)