JP Morgan "Bank of Korea to Raise Interest Rates Three More Times This Year... Year-End Base Rate Expected at 2.5%"

Lee Chang-yong, Governor of the Bank of Korea, is explaining the base interest rate hike at a press conference held at the Bank of Korea in Jung-gu, Seoul on the 26th. / Photo by Joint Press Corps

Global investment bank (IB) JP Morgan maintained its previous forecast on the 26th that the Bank of Korea will raise the base interest rate three more times within the year, reaching 2.5% by the end of this year, following the 0.25 percentage point increase.

In a report released that day, JP Morgan analyzed, "The Bank of Korea indicated hawkish (preference for monetary tightening) forward guidance by stating that the base interest rate needs to be normalized to converge to a neutral interest rate level in response to the inflation trend."

The report added, "The Bank of Korea's announcement that it will focus on inflationary pressures rather than GDP growth for some time confirms the expectation of consecutive 0.25 percentage point base rate hikes in July, August, and October."

It continued, "Bank of Korea Governor Lee Chang-yong's explanation that it is reasonable to expect the year-end base rate to be in the range of 2.25 to 2.5% also aligns with the anticipated successive base rate hikes."

The report also maintained the previous forecast that the Bank of Korea will raise the base interest rate to 2.75% by the first quarter of next year.