Bank of Korea Holds Base Rate in October, Possible Increase to 3.25% in November

The Bank of Korea has frozen the base rate in October, with analyses suggesting a potential increase to 3.25% in November. Kim Myung-sil, a researcher at iM Securities, stated in a report on the 5th that "the scenario of an additional increase to 3.25% in November has gained weight following the freeze in October." He added, "We must also keep open the possibility of raising it to 3.50% in the first half of next year if necessary." The Bank of Korea raised the base rate twice consecutively in July and August this year. The remaining monetary policy meetings are scheduled for October 22 and November 26. Researcher Kim believes that while domestic growth is maintained, the risk of financial imbalance remains, which could lead to a continuation of the tightening stance. In the bond market, opinions varied by maturity, with the 3-year and 5-year segments being assessed as more reflective of the policy path. Inflation was also highlighted as a key variable in the interest rate trajectory, with consumer prices in August 2026 rising 3.1% compared to the same month last year. Researcher Kim noted that the headline inflation in September could drop to a level of 2.5-2.7%. In monetary policy, headline inflation serves as an indicator of the overall consumer price trend, and the central bank considers both the underlying inflation and financial stability situation. While the domestic base rate does not directly determine cryptocurrency prices, a higher interest rate increases the relative attractiveness of BTC and ETH.