JPMorgan Ups South Korean Interest Rate Forecast Amid Chip Boom

JPMorgan Chase & Co. has increased its forecast for South Korean interest rates due to the impact of the semiconductor industry on inflation.

The Wall Street lender expects the Bank of Korea (BOK) to raise rates in November and again in February and May next year, taking the benchmark rate to 3.75% in the current tightening cycle.

This is above the 3.5% median forecast in Bloomberg's survey of economists, which sees the rate staying at that level through the second quarter of 2028.

JPMorgan economist Seok Gil Park notes that while it's difficult to predict where the terminal rate will be, there are risks of a higher terminal rate due to the current macroeconomic shock caused by the chip boom.