On August 27, 2026, the Bank of Korea’s Monetary Policy Board raised the base rate from 2.75% to 3.00%, an increase of 0.25 percentage points. This was the second consecutive monthly increase after the rate was raised from 2.50% to 2.75% on July 16, 2026.
On the same day, the Bank of Korea raised its forecast for real GDP growth in 2026 from 2.6% to 3.3%, an increase of 0.7 percentage points. In other words, it raised both interest rates and its growth outlook.
Why Did the Bank Raise Rates While Increasing Its Growth Forecast?
The Bank of Korea cited the semiconductor boom, strong growth in exports and investment, and a recovery in consumption resulting from improved income conditions as the main reasons for raising its growth forecast. It also raised its growth forecast for 2027 from 2.1% to 2.9%.
At the same time, the Monetary Policy Board said inflation was expected to remain above the target level for a considerable period and that financial stability risks also required attention. The July 2026 consumer inflation rate was reported at 2.8%, while core inflation was 2.6%.
The higher growth outlook and the base-rate increase are not necessarily contradictory. They can be understood as a policy judgment that growth momentum has been confirmed while inflation and financial stability risks must still be addressed.
Vote Was 6–1… No Decision Yet on Further Increases
Six of the seven Monetary Policy Board members voted in favor of the increase. Board member Hwang Geon-il supported keeping the base rate unchanged at 2.75%.
However, no decision has been made on the timing of any further increase or on the terminal rate. The 3.3% growth forecast for 2026 is also a Bank of Korea projection, not a finalized result, and may be revised later.
What Households and Financial Markets Should Watch
A base-rate increase can affect lending rates, exchange rates, housing prices, and household borrowing. However, the actual change in individual financial product rates and household burdens depends on the financial institution, product, and borrower’s circumstances. It is difficult to assume that the full base-rate increase will apply equally to all lending products.
Borrowers should therefore check the interest-rate terms and adjustment mechanisms of their own products. Changes in deposit and lending rates should be reviewed based on announcements from their financial institutions.
Verified Sources
Bank of Korea base-rate history (checked August 29, 2026, at 16:30): [Bank of Korea Base Rate History](https://www.bok.or.kr/portal/singl/baseRate/list.do?dataSeCd=01&menuNo=2006)
Bank of Korea Monetary Policy Direction (August 27, 2026): [Bank of Korea Monetary Policy Direction](https://www.bok.or.kr/portal/bbs/P0000559/view.do?depth=200690&menuNo=200690&nttId=11064191&programType=newsData&relate=Y)
Bank of Korea Economic Outlook Report (August 2026): [Economic Outlook Report](https://www.bok.or.kr/portal/bbs/P0002359/view.do?depth=201150&menuNo=200066&nttId=11064210&oldMenuNo=201150&pageIndex=1&pageUnit=10&programType=newsData&searchCnd=1&searchKwd=)
Yonhap base-rate report (August 27, 2026): [Base Rate Raised Consecutively to 3%](https://www.yna.co.kr/amp/view/AKR20260827045900002)
Yonhap growth-forecast report (August 27, 2026): [This Year’s Growth Forecast Raised from 2.6% to 3.3%](https://www.yna.co.kr/view/AKR20260827023052002)
※ This article is based on information verified in the Research Package through August 29, 2026, at 16:30. Economic forecasts and financial product rates may change thereafter.