Citi Sees BOK Raising Rate Toward 3% This Year on Inflation Risk

The Bank of Korea is likely to raise its policy rate to 3% this year as a surge in global oil prices drives inflation higher, according to Citigroup Inc.

The central bank is expected to deliver two 25 basis-point hikes — one in July and a second in October — bringing the benchmark rate near 3%, Jin-Wook Kim, a Citigroup economist, wrote in a note Wednesday. Those moves would mark a renewed tightening cycle following a prolonged hold, as price pressures prove more persistent than previously anticipated, the economist added.