• Acceleration of vaccination and the pace of economic recovery have raised
prospects of policy normalisation to resume in late-2021.
• Rate hikes will likely come earlier than expected, while the pace would
remain gradual.
• Implications for our forecasts: We now expect the BOK to raise the
benchmark rate from 0.50% to 0.75% in 4Q21, and to 1.25% by end-2022.
• Implications for investors: Relative to our forecast, markets’ pricing of hikes
over the next 12 months appears overly aggressive.