French Credit: After July Rate Hike, South Korean Central Bank More Likely to Raise Rates Again in October

On July 15, French Credit Bank stated that the market widely expects the South Korean central bank to raise the policy rate by 25 basis points to 2.75% on July 16. The central bank has repeatedly emphasized the necessity of rate hikes, so market participants will closely monitor its hints regarding the timing of the next rate increase and the terminal rate of this hiking cycle. Considering that the South Korean central bank will update its macroeconomic forecasts and six-month guidance only in August, and that international crude oil prices have retreated since the last meeting, it is expected that the central bank will not signal consecutive rate hikes in August but is more likely to take action in October. In the July meeting, the South Korean central bank may signal further rate hikes but will not provide a specific timeline in order to observe more data.