The Monetary Policy Committee of the Bank of Korea held a monetary policy direction meeting this morning (26th) and decided whether to raise the base rate, which is currently 1.50%.

This meeting is the first meeting chaired by Lee Chang-yong, governor of the BOK, since his inauguration, and the prevailing view is that the MPC will raise the key interest rate by 0.25 percentage points in response to the domestic consumer price inflation and the big step in the US Federal Reserve.

The BOK also released a revised economic forecast today, and is expected to raise its forecast for consumer price inflation this year from 3.1% to 4%.

If the BOK proposes a 4% inflation forecast, this is the first time in 10 years and 10 months since the 4.0% annual forecast in July 2011.