Market Interpretation: Inflation Rebound Keeps Bank of Korea on Track for July Rate Hike.

Bloomberg Economics Research said that the inflation rate in June further increased, exceeding the Bank of Korea's target level of 2%, indicating that high oil prices are being passed on to consumer prices. This inflation data increases the necessity for the central bank to tighten monetary policy to prevent inflation from forming a long-term entrenched trend. It is expected that the Bank of Korea will start a tightening cycle on July 16, increasing the interest rate by 25 basis points for the first time. Then, another 25 basis points hike in October, and two more hikes next year, raising the policy rate from the current 2.5% to 3.5% in the first half of 2027.