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Central Banks

South Korea Seen Opting for Smaller Interest-Rate Hike on Credit Risks

  • Credit rout adds to concerns over South Korean economic growth
  • Bank of Korea balancing elevated inflation with slowdown signs
BOK Governor Rhee Chang-yong 

BOK Governor Rhee Chang-yong 

Photographer: Woohae Cho/Bloomberg

The Bank of Korea is poised to return to its usual pace of policy tightening Thursday as it aims to rein in inflation without exacerbating credit risks that threaten to weigh on economic growth.

Fifteen of 17 surveyed economists see the central bank raising its key interest rate by a quarter percentage point to 3.25%. The remaining two expected it will back up last month’s half percentage-point increase with another move of that scale.