Nomura: The end of the interest rate cut cycle by the Bank of Korea, the risk of overheating in the economy may force a rate hike.

According to the Wisdom Financial APP, Nomura Holdings pointed out that the interest rate cutting cycle of the Bank of Korea has ended, and it is very likely to keep interest rates unchanged in 2026, and with the strengthening of economic growth, the risk of the next action now tends to be a rate hike. Nomura economist Jeong Woo Park said that this change reflects the market's expectation that South Korea's economy will expand at a pace faster than its potential growth speed next year, supported by stronger domestic consumption, construction industry recovery, and the global semiconductor upswing cycle. He added that he expects South Korea's economy to close the gap with potential output around the second quarter of next year, earlier than the Bank of Korea's forecast, reducing the need for further easing.