Bank of Korea Hikes Base Rate to 3.0%... Aims to Curb Inflation Driven by Semiconductor Boom

The Bank of Korea’s Monetary Policy Board held a meeting on August 27, 2026, at the BOK headquarters in Jung-gu, Seoul, presided over by Governor Shin Hyun-song. To curb potential inflation driven by the recovering semiconductor industry, the board raised the benchmark interest rate by 0.25 percentage points from an annual 2.75% to 3.00%. This marks the second consecutive increase following last month, signaling an intention to respond preemptively before inflationary pressures intensify.

The decision was passed with six votes in favor and one against (Hwang Geon-il) out of seven attending members.

At a press conference following the meeting, Governor Shin emphasized his determination to take early action before inflation spreads, citing the proverb, ' nip it in the bud .'

According to the Bank of Korea, Governor Shin departed for the United States after the board meeting to attend the Economic Policy Symposium in Jackson Hole.