South Korea's central bank is expected to hold the base rate steady at 2.50% at its rate-setting meeting on May 28, 30 out of the 32 economists projected in a poll by Reuters.
In addition, most of the economists expect one or more rate hikes by the end of this year as the U.S.-Iran war is projected to add inflationary pressures, Reuters said.
The rate hike expectations come after inflation surpassed the central bank's 2% target, with April inflation hitting its highest level in nearly two years as the ongoing war in the Middle East and the blockade of the Strait of Hormuz kept oil prices above $100 a barrel for almost three months, it said.
The Bank of Korea is also expected to raise this year's growth forecast from 2% on Thursday, making the case strong for further rate hikes ahead, the report said.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)