The Bank of Korea (BoK) left its base rate unchanged at 3.00% at its October 2026 meeting, in line with expectations, pausing after rare back-to-back 25-basis-point hikes in July and August to address inflation risks. The decision gives policymakers more time to assess how households and businesses are responding to higher borrowing costs, amid persistent price pressures and strong export-driven growth. Annual consumer inflation eased to 2.9% in September from 3.1% in August but remained above the BoK’s 2% target, while one-year-ahead inflation expectations held at 2.7%. Producer price inflation also reached 7.7% in September, raising concerns about further pass-through to consumer prices. Meanwhile, strong semiconductor exports driven by global AI demand supported growth, prompting the BoK to raise its 2026 growth forecast to 3.3% from 2.6% in August. The BoK’s August projections pointed to one further rate hike before year-end.