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Three percent is the Bank of Korea's new benchmark rate, reached after a 25-basis-point hike that places the policy rate at its highest level since January 2025. The move was in line with expectations.
Core inflation remains elevated.
| Metric | Reported | |---|---| | Policy rate (new) | 3.00% | | Change | +25 bps | | Prior rate (implied) | 2.75% | | Last at this level | January 2025 | The math reconciles: 25 basis points added to the prior 2.75% arrives at exactly 3%.
Elevated core inflation is the driver. Core measures strip out food and energy prices, so persistence at elevated levels points to demand or cost pressure that is broad-based rather than tied to a single commodity cycle.
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