The Bank of Korea Monetary Policy Board members' six-month outlook for the base rate, released today (the 27th) in a dot plot format, showed a maximum projection of 3.50%, up 0.25 percentage points from three months ago.

During the monetary policy direction meeting this morning, where the board raised the base rate by 0.25 percentage points to 3.00% per annum, 16 out of the total 21 dots were plotted at levels higher than the current rate.

Among them, 10 dots were concentrated at 3.25%, which is 0.25 percentage points higher than the current rate, making it the most frequent projection, while 6 dots were placed at 3.50%.

Additionally, 5 dots were plotted at 3.00%, the same as the current rate.

This indicates that the majority of board members expect one to two additional rate hikes over the next six months.

The dot plot is compiled by having seven board members, including BOK Governor Shin Hyun-song, each plot three dots totaling 21 dots to express their individual expectations for the base rate level six months into the future.

Members each plot three dots considering the default value along with upside and downside risks, and they are allowed to place all their dots on the same rate level.

First introduced in February, the dot plot is released four times a year in February, May, August, and November.

This month's dot plot shifted even higher in distribution compared to three months ago, which had already shown a strong "hawkish" (favoring monetary tightening) inclination with a high concentration of rate hike expectations.

In the May dot plot, 19 out of 21 dots were plotted above the base rate of 2.50% at the time, but the upper bound of the expected rate was 3.25%, lower than this time.

In May, the highest concentration of 10 dots was at 3.00% per annum, followed by 7 dots at 2.75%, and 2 dots each at 2.50% and 3.25%.

The upward revision in the six-month rate outlook appears to stem from the BOK accelerating its tightening stance through an unusual back-to-back rate hike this month.

(Photo: Provided by Bank of Korea, Yonhap News)