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Korean won rises as Bank of Korea lifts rates toward 3.25%
ING says back-to-back BoK hikes to 3.00% and a dot plot pointing to 3.25% in six months are also tied to upgraded 2026 and 2027 GDP forecasts from a chip export boom.
ING’s Chris Turner said the South Korean won is extending gains, supported by back-to-back Bank of Korea rate hikes that put the policy rate at 3.00%. The BoK’s dot plot also points to a further move higher, with the median expectation for the policy rate to reach 3.25% in about six months, according to FXStreet.
Turner added that the strengthening outlook is not only linked to inflation, but also to broadening and strengthening growth prospects. ING cited upgraded GDP forecasts for 2026 and 2027 that it ties to a chip export boom feeding through across much of the economy.
The article noted a potential constraint from currency strength, saying KRW/JPY has quickly returned to the high levels seen in 2023 and 2024. ING said authorities may worry about competitive pressure from Japan, though it expects local policymakers to tolerate the current level of won strength after a prolonged period of weakness.