99% Of Bond Experts Say "Monetary Policy Board Will Keep Base Rate Unchanged In February"

Kofia Releases "Bond Market Survey Index for March"

The majority of bond market experts expect the Bank of Korea to keep its base rate unchanged at the Monetary Policy Board meeting scheduled for the 26th of this month.

On the 24th, the Korea Financial Investment Association released the “Bond Market Survey Index for March 2026,” which contains the results of a survey conducted from the 10th to the 13th of this month on 100 professionals engaged in bond holding and management.

According to the survey, 99% of respondents answered that the base rate will be kept on hold at the Bank of Korea’s Monetary Policy Board meeting on the 26th. The Korea Financial Investment Association stated, “As the won-dollar exchange rate continues to stay at a high level and the likelihood of the US Federal Open Market Committee (FOMC) keeping its policy rate unchanged has increased, expectations for a rate freeze by the Monetary Policy Board have risen compared with the previous survey.”

While the domestic base rate is expected to remain unchanged, the perception that market rates have approached the upper end of their range persists, leading to an increase from the previous month in both the share of respondents expecting rates to rise and those expecting rates to fall. A total of 16% of respondents forecast higher interest rates, up 10 percentage points from the previous month. At the same time, the proportion expecting lower rates rose by 7 percentage points to 34%.

The Bond Market Survey Index (BMSI) for March stood at 96.5, down 0.3 points from the previous month. This slight deterioration is interpreted as reflecting concerns over inflation due to higher international oil prices and expectations that the stock market will continue to be strong. The BMSI represents sentiment in the bond market; a reading of 100 or above indicates favorable sentiment, such as expectations for bond price increases (and interest rate declines).

Bond market sentiment related to the exchange rate improved compared with the previous month. The share of respondents expecting the won to weaken against the dollar to reverse and the exchange rate to decline reached 32%, up 22 percentage points from the previous month. Meanwhile, 12% of respondents (28% in the previous month) expected the exchange rate to rise, down 16 percentage points from a month earlier.

The Korea Financial Investment Association explained, “The proportion of respondents expecting the exchange rate to fall increased from the previous month, reflecting forecasts by major global investment banks (IBs) for a weaker dollar-won rate and expectations of foreign capital inflows as Korea begins to be included in the FTSE World Government Bond Index (WGBI) in April.”

Due to the rise in international oil prices driven by heightened geopolitical risks in the Middle East and the increase in import prices caused by the weak won, the share of respondents expecting lower inflation decreased from the previous month. The proportion of respondents expecting prices to fall dropped from 9% last month to 0% this month. Meanwhile, 15% of respondents expected inflation to rise, unchanged from the previous month.