The Bank of Korea decided to maintain the base policy rate at 3.5 percent for the 11th consecutive time, while increasing the country's economic growth rate estimate from 2.1 percent to 2.5 percent. BOK Governor Rhee Chang-yong cited strengthening inflationary risks and geopolitical tensions as reasons for keeping the base rate unchanged. He also provided forward guidance on the rate, stating that while one board member suggested the possibility of a rate cut in three months, the majority agreed to maintain the rate at 3.5 percent. Additionally, the BOK raised the estimate for the country's gross domestic product growth rate from 2.1 percent to 2.5 percent, attributing this revision to better-than-expected exports and lower-than-expected imports. Despite the positive economic outlook, the inflation forecast remained at 2.6 percent. Looking ahead, Rhee maintained a cautious approach to monetary policy, emphasizing the need for more time to have confidence that inflation will align with the target rate of 2 percent. He also highlighted the potential risks of adjusting the policy stance too early or too late, underscoring the uncertainty surrounding the timing of a rate cut due to heightened inflationary risks.