Seoul:The Bank of Korea (BOK) decided to maintain its benchmark interest rate at 3 percent during its recent meeting, following two consecutive rate hikes. This decision comes as the central bank evaluates economic conditions amid ongoing tensions in the Middle East and strong export performance.

According to Yonhap News Agency, the BOK's Monetary Policy Board unanimously supported the rate freeze, which follows rate increases in July and August aimed at tackling inflationary pressures and ensuring macroeconomic stability. The board emphasized the need to assess both domestic and external risk factors while maintaining the current base rate.

The BOK has indicated that it will continue a hawkish policy stance due to inflationary pressures from rising oil prices and renewed uncertainty in the Middle East, alongside a robust economic recovery. Governor Shin Hyun-song emphasized the necessity of ongoing monetary tightening despite the recent rate freeze.

Consumer prices have been around the 3 percent mark, with inflation expected to persist at this level in October. The country's economic growth, supported by strong semiconductor exports and a favorable currency exchange rate, has further reinforced the BOK's approach.

The BOK has revised its 2026 growth forecast upward, suggesting significant expansion, driven by the semiconductor sector and improving consumption. However, Shin noted the need for careful design of fiscal spending to prevent temporary measures from becoming permanent.

The central bank will continue to monitor inflation trends and financial stability, with market experts predicting another rate hike in the upcoming policy meeting scheduled for November 26.