The Bank of Korea (BOK) kept its benchmark interest rate unchanged at 2.5% on Thursday, citing ongoing uncertainty from the Middle East conflict, but signalled that rate hikes are likely ahead as inflation accelerates and the South Korean won comes under pressure. The decision, the eighth consecutive hold, came at the first policy meeting chaired by new BOK Governor Shin Hyun-song, who warned of "no tolerance for one-sided" currency movements as the won hovers near the psychologically significant 1,500-per-dollar level. The central bank also revised its 2026 inflation forecast sharply upward to 2.7% from 2.2%, driven by soaring oil prices linked to the U.S.-Iran war and the closure of the Strait of Hormuz, while raising its growth outlook to 2.6%, buoyed by strong semiconductor exports.