More than nine in 10 bond market specialists expect the Bank of Korea to leave its policy rate unchanged at this month's monetary policy board meeting. The share forecasting lower market yields nearly doubled in a month, as a flight to safety triggered by a plunge in local stocks combined with expectations that both Korea and the U.S. will hold rates steady.
Of those surveyed, 93% expect the Bank of Korea to hold its base rate at the board meeting on the 22nd, according to the November 2026 bond market survey released by the Korea Financial Investment Association on the 20th. Respondents appear to expect the central bank to assess the impact of its two consecutive rate increases before acting again. The survey was conducted from the 12th to the 15th among people who hold or manage bonds, drawing 100 specialists from 53 institutions.
The share of respondents expecting market yields to fall also rose sharply. Forty percent forecast lower yields in November, up 19 percentage points from 21% the previous month. Those expecting higher yields fell to 17% from 22%, a drop of 5 percentage points, while those expecting yields to hold steady declined to 43% from 57%. The association attributed the shift to risk aversion stemming from the correction in local stocks and expectations of policy holds in Korea and the U.S., which outweighed external upward pressure such as rising French government bond yields.
The interest rate outlook component of the Bond Market Survey Index rose to 123.0 from 99.0 a month earlier, a gain of 24.0 points. The overall November BMSI climbed 9.4 points to 99.1 from 89.7. A reading above 100 indicates favorable sentiment in the bond market. The overall index remained below that threshold but showed improvement from the previous month.
The inflation component, by contrast, fell 7.0 points to 93.0 from 100.0. A September U.S. consumer price index reading that came in above market expectations and concerns about higher oil prices tied to tensions in the Middle East weighed on the figure. The share of respondents expecting inflation to ease fell to 3% from 13%, while those expecting it to hold steady widened to 87% from 74%.
The foreign exchange component also dropped 11.0 points to 98.0 from 109.0. Amid geopolitical uncertainty in the Middle East and greater volatility in local stocks, the share expecting the won to weaken rose to 13% from 4% the previous month. Those expecting the currency to strengthen edged down to 11% from 13%.