BNP Paribas Expects Bank of Korea to Hold Rate Steady on August 27 Amid Currency Stabilization

According to BNP Paribas economist Yoon Ji-ho, the Bank of Korea is likely to hold its benchmark rate steady on August 27, despite competing growth and inflation signals. While economic expansion continues to outpace forecasts and core inflation pressures persist, recent stabilization in the dollar-won exchange rate, crude oil prices, and domestic stock market declines have reduced the urgency for further rate increases.

Yoon noted that the decision remains a close call, with rate hike arguments offset by moderating price transmission risks through currency movements and limited asset effects from equity market weakness. BNP Paribas maintains its base case for 25 basis point increases in October and January 2027.