With inflation at a 24-year high, the Bank of Korea (BoK) looks certain to raise interest rates again at its meeting on Thursday. We have pencilled in another 25bp hike, which would take the policy rate to 2.50%. However, we think inflation has now peaked. In addition, worries about rapidly rising debt and rapid house price growth, which was the key concern of the central bank a year ago, have started to ease. As such, we think the tightening cycle will be over by the end of this year.
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