More than 8 out of 10 bond experts expected the Bank of Korea's Monetary Policy Committee to freeze the benchmark interest rate in August.
The Korea Financial Investment Association announced on the 26th the 'September 2025 Bond Market Indicator' containing this information. Among those who participated in the survey, 84% predicted that the Monetary Policy Committee would decide to freeze the benchmark interest rate at the meeting on the 28th.
The Korea Financial Investment Association noted, "While concerns about a downturn in the economy continue and the number of respondents expecting a rate cut has increased compared to the previous survey, due to ongoing household liabilities and instability in the real estate market, as well as increased volatility in the foreign exchange market, the expectation of a freeze in the benchmark interest rate at the August Monetary Policy Committee was predominant."
The bond market sentiment index related to market interest rates (interest rate outlook BMSI) was recorded at 118, worsening from last month's 138. This is interpreted as a result of decreased expectations for a benchmark interest rate cut and the prolonged high interest rate trend worldwide.
Similarly, the bond market sentiment index related to exchange rates worsened from last month's 123 to 98. As technology stocks faced corrections in the U.S. stock market, the strengthening of the dollar intensified, leading to an increase in respondents expecting the won to appreciate against the U.S. dollar in September.
On the other hand, the bond market sentiment related to inflation showed a slight improvement.
The August bond market sentiment index (BMSI), which summarizes the survey results, rose by 4.6 points to 110.4 compared to the previous month. BMSI is calculated based on individual survey items regarding interest rates, prices, exchange rates, and more. When BMSI exceeds the baseline of 100, it indicates an improvement in bond market sentiment.