The Bank of Korea (BOK) is widely expected to raise its benchmark interest rate by 25 basis points to 2.75% when its Monetary Policy Board meets on Thursday, reflecting a steady shift in the central bank’s assessment of the economy after several months of stronger-than-expected growth, firmer inflation and renewed financial stability concerns. It would be the first rate increase since Jan. 2023, with Governor Shin Hyun-song having signaled repeatedly that conditions now warrant tighter monetary policy.

The Board’s decision will follow June inflation of 3.2%, continued strength in semiconductor-led exports, a weaker won and rising household debt,