Citibank: Bank of Korea may hint at gradually raising interest rates in the second half of the year.

Jin-Wook Kim of Citigroup Group stated that the Bank of Korea, after raising the benchmark interest rate from 2.50% to 2.75% at next week's policy meeting, may suggest a gradual pace of rate hikes. The economist expects Bank of Korea Governor Lee Ju-yeol to hint at raising rates by 25 basis points each quarter in the second half of 2026, while maintaining a data-dependent strategy and providing no specific guidance for the first half of 2027. Citigroup predicts that the Bank of Korea will raise rates in July and October this year, and again in January and April next year. Kim added that the Bank of Korea may also emphasize the upside risks to its 2026 growth forecast, citing the upward revision in first-quarter growth and the resilient economic activity in the second quarter.