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Won steadies after BoK lifts rate to 2.75% amid chip-linked volatility

The Bank of Korea raised its base rate by 25 basis points and flagged higher-than-forecast GDP and core inflation, while South Korea also moved to curb leveraged single-stock ETF/ETN speculation in memory chip names.

Reported · Written up by our desk · Central Banks

BNY’s Geoff Yu pointed to a hawkish turn from the Bank of Korea, which lifted its base rate by 25 basis points to 2.75% in a unanimous 7-0 decision. The central bank guidance suggested GDP and core inflation are expected to run above earlier forecasts, and it struck a more hawkish tone that kept further hikes on the table.

BNY said the BoK cited sticky inflation and rising financial stability risks, with core inflation now projected to exceed the May forecast of 2.4%, and headline inflation expected to hold near the May level of 2.7%. The bank also pointed to stronger semiconductor-led exports, firm investment, improving domestic demand, faster house price gains, higher household debt, and heightened exchange rate volatility.

The backdrop includes weakness in Asian semiconductor stocks after a sharp selloff in US chipmakers, pressuring the KOSPI and the USD/KRW. FXStreet noted South Korea’s authorities tightened rules for single-stock leveraged ETF/ETN products, announcing a temporary suspension of new listings, a ban on advertising and event marketing, and tighter risk controls aimed at reducing further volatility in memory chip names.

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