Bank of Korea Leaves Door Open for Back-to-Back Rate Hike Ahead of July 23 GDP Release

According to Bank of Korea Governor Shin Hyun-sung, on July 20, the central bank left open the possibility of consecutive rate hikes, with Q2 GDP data due on July 23 expected to be a decisive factor. Shin emphasized that core inflation's convergence to the 2% target depends on how monetary policy responds, noting that effective policy could prevent prolonged elevation above target levels.

Rising oil prices, partly driven by escalating tensions between Iran and the U.S. following reports of American military casualties in the region, add to inflation pressures the central bank must monitor. Market participants expect several more rate increases and are focused on the effectiveness of policymaking as the central bank balances rapid nominal growth against inflation control risks.