Citi: If oil prices push inflation above 3%, the Bank of Korea may turn hawkish

According to Golden Ten Data on March 9, Citigroup economist Jin-Wook Kim stated that if rising oil prices push the inflation rate above 3%, widening the gap with the Bank of Korea's 2% target, the central bank may shift to a hawkish stance. Kim wrote in a report that if the inflation gap exceeds 1 percentage point and persists, the Bank of Korea may begin to gradually raise interest rates by 25 basis points. Kim added that if the inflation gap exceeds 2 percentage points, the Bank of Korea may turn to aggressive tightening, possibly raising rates by 50 basis points at each meeting and prioritizing price stability over growth. South Korea's inflation rate remained at 2% in February, but the escalating Iran conflict and rising oil prices could push inflation higher in the coming months.