Bank of Korea seen hiking to 2.75% this week, on Thursday, more to come by year end

A near unanimous poll result leaves little room for surprise on the decision itself, so the real interest lies in the pace beyond Thursday, whether the BOK delivers a single further move to 3% this year or opens the door to back to back hikes if the won keeps weakening. The BOK's move also confirms South Korea is following, rather than leading, a regional pattern already seen in Australia, New Zealand, Indonesia and the Philippines, all responding to the same oil driven inflation shock out of the Middle East. A weaker won compounding imported cost pressure gives the hawkish case extra weight, and markets are likely to watch the accompanying rhetoric as closely as the rate decision itself for clues on the 2027 path. --- South Korea is about to join the regional tightening club, and markets already expect a second move. Summary: 36 of 37 economists polled by Reuters expect the Bank of Korea to raise its base rate to 2.75% at its July 16 meeting, the first hike in more than three years 28 of 31 economists expect a further hike to 3.00% by the end of the year, with one forecast at 3.25% and two at 2.75% Median forecasts point to the rate reaching 3.25% in the first quarter of 2027 and holding there through at least the end of that year, 25 basis points higher than the May survey Consumer inflation rose to a two and a half year high of 3.2% in June, above the BOK's 2% target for a fourth straight month, and is expected to average around 3% through the second half of the year BOK Governor Shin Hyun-song said higher rates were necessary given inflation is expected to exceed target for a considerable period, driven by high oil prices tied to the...