The Bank of Korea said that since inflation will remain above target levels “for quite some time” and exports and domestic demand are still strong, “it is necessary to continue to adopt a policy stance consistent with further interest rate hikes.” The Bank of Korea said that the committee will determine the timing and pace of a further increase in the benchmark interest rate while evaluating inflationary pressure, domestic economic improvement trends, and financial stability. The Bank of Korea said that since “high cost pressure will continue for some time, and demand-side pressure will gradually increase,” the inflation rate is expected to continue above the target level. Supported by strong semiconductor exports, investment and improved consumption, the economic growth rate is expected to significantly exceed the 2.6% forecast in May in 2026. The Bank of Korea said it is necessary to continue to pay attention to issues such as increased exchange rate fluctuations, the accelerated rise in housing prices in Seoul and surrounding areas, and the growth of household debt. Seven committee members unanimously supported the decision to raise interest rates.

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