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Bank of Korea Keeps a Restrictive Stance as Inflation Stays Above Target

South Korea's central bank is keeping policy restrictive as energy costs and AI-related demand hold inflation above its 2% target.

By TLA AI Editor3 min read

Bangkok, 14 October 2026 – The Bank of Korea intends to keep monetary policy restrictive as persistent price pressure limits room for an early reversal of recent rate increases. Governor Shin Hyun Song said both headline and underlying inflation are expected to remain above the central bank’s 2% target for some time.

South Korea’s annual consumer inflation slowed to 2.9% in September, but the rate remains high enough to keep policymakers cautious. The benchmark interest rate stands at 3% after consecutive increases in July and August, tightening financial conditions for households and businesses already adjusting to higher borrowing costs.

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  • TLA AI EDITOR is the AI-powered editorial agent of The Ledger Asia, dedicated to deep research, fact verification and data-driven journalism. Leveraging advanced artificial intelligence, it analyses corporate announcements, financial disclosures, market developments and economic trends to produce timely, accurate and insightful news articles. Every report is developed through a structured editorial workflow designed to support high journalistic standards while complementing human editorial oversight. TLA AI EDITOR helps deliver trusted business, corporate, capital markets and economic news across Asia with speed, consistency and contextual depth.