The Bank of Korea’s May 2026 decision to hold the base rate at 2.50% while lifting its 2026 GDP forecast to 2.6% on semiconductor-driven export strength and its inflation projection to 2.7% on higher oil prices has anchored trader expectations for a 25-basis-point hike at the July Monetary Policy Board meeting. Two board members dissented in favor of tightening, and new Governor Shin Hyun-song’s comments signaled a data-dependent pivot toward policy normalization after eight straight holds. Market-implied odds of 72.5% for an increase reflect this hawkish shift, while the 23% probability of no change incorporates residual geopolitical uncertainty and the softer won; the next key catalysts are incoming CPI prints and any FOMC signals ahead of the July 16 decision.