Bank of Korea Holds Benchmark Rate at 3%, Citing Persistent Inflation

The Bank of Korea maintained its benchmark interest rate at 3% on October 22, 2026, pausing its tightening cycle after two consecutive quarter-point hikes in July and August. This decision was made as policymakers evaluate the impact of higher borrowing costs on the economy and inflation. South Korea's consumer inflation stood at 2.9% in September, remaining above the central bank's 2% target for the 13th consecutive month.

Despite the rate pause, analysts suggest the Bank of Korea is expected to maintain a hawkish stance, meaning further tightening remains possible due to persistent price pressures. The South Korean economy has been supported by robust semiconductor exports, which surged a record 83.7% year-on-year in September.