Bank of Korea Raises Key Rate to 3%, Tightening Market Liquidity

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.

1. Base Rate at 3%: A Time of Tightening Arrives

Key summary: The Bank of Korea raised its base rate by 0.25 percentage point to 3%, delivering increases in two consecutive months for the first time since January 2023, or three years and seven months. Governor Shin Hyun-song said the move was a preemptive response aimed at stabilizing prices, the exchange rate, home prices and household debt, and the central bank lifted its GDP growth forecast for this year to 3.3% from 2.6% on the strength of semiconductor-led growth. The governor expressed caution about additional hikes within the year, but most Monetary Policy Board members projected a base rate of 3.25% six months from now, raising the likelihood of another increase early next year. Heavier loan repayment burdens on vulnerable groups and concerns about a mismatch between expansionary fiscal policy and tightening monetary policy are emerging as sources of market volatility.

2. Jensen Huang: "Nvidia to Grow 70% Next Year, Could Have Doubled Without Memory Bottleneck"

Key summary: Nvidia's second-quarter (May-July) revenue reached $96.22 billion and operating profit $63.734 billion, surging 106% and 124% respectively from a year earlier. The data center division, which includes AI chips, drove the results with $89 billion in revenue, and the customer base diversified from hyperscalers to sovereign AI and neocloud operators. Nvidia's component supply commitments swelled to $279 billion, more than double the previous quarter, and memory shortages were flagged as continuing until January 2028. The consensus estimate for Samsung Electronics' operating profit this year stands at 394 trillion won, up 804.6% from a year earlier, while SK hynix is estimated at 266 trillion won, a 464% jump, with record results expected in 2028.

3. Ultra-Wealthy Investors, Disappointed by Shareholder Returns, Sell Samsung Electronics Again

Key summary: A group of 7,500 ultra-high-net-worth investors holding at least 3 billion won in financial assets net sold 91.3 billion won of Samsung Electronics this month, from the 1st through the 24th, making it the most heavily net sold stock for a second straight month. Although Samsung Electronics approved a shareholder return program of up to 110 trillion won, the specifics were deferred to an October board meeting, and with no immediate share price reaction, selling pressure continued. SK hynix, by contrast, drew 122.1 billion won in net buying, and the portfolio shift from leveraged exchange-traded funds, which led last month, toward large-cap stocks was pronounced. Brokerages largely read the Samsung Electronics selling as switching demand between stocks and profit-taking rather than a weakening of buying interest in semiconductors.

4. Fed Chair Warsh Makes Jackson Hole Debut as Markets Watch Policy Direction

Key summary: Federal Reserve Chair Kevin Warsh, who took office in May, drew the attention of global financial markets as he delivered his first speech at the Jackson Hole meeting at 11 p.m. Korea time on the 28th. The Fed's benchmark rate is being held at 3.50-3.75%, while markets price a 61.6% probability of a hold and a 38.4% probability of a hike at the September FOMC meeting, leaving the direction unclear. Warsh has continued to depart from established Fed practice, scrapping forward guidance and even proposing a reduction in the number of scheduled FOMC meetings. With U.S. Treasury yields trading near their highest levels since the global financial crisis, the tone of the speech is expected to have a direct impact on foreign investor flows into Korean stocks and on the won.

5. Trump Weighs Steep Chip Tariffs Extending to Laptops and Servers

Key summary: The Trump administration is discussing a plan to sharply broaden the scope of semiconductor tariffs to cover finished products containing chips, including laptops, game consoles and data center servers, Politico reported, citing multiple sources. Options under consideration also include setting separate tariff rates and import quotas by country and applying country-specific guidelines to major chipmakers. Concerns have been raised that expanded tariffs could make it harder to secure the chips needed for AI investment and slow the pace of infrastructure expansion. The plan could still be substantially revised, but it could become a new variable in the U.S. export strategies and price negotiations of Samsung Electronics and SK hynix, warranting close attention.

6. Retail Investors Weary of Range-Bound Market as Deposits Fall Back Below 100 Trillion Won

Key summary: Investor deposits fell back below the 100 trillion won mark to 98.9176 trillion won, more than 40 trillion won below the record high of 139.6947 trillion won reached in June. Individuals net sold 2.2468 trillion won on the main bourse on the 26th while deposits plunged at the same time, a pattern indicating that money from liquidated stock positions is leaving brokerage accounts rather than staying in them. Margin loan balances, by contrast, rose for a seventh straight session to 33.1023 trillion won, creating an unstable supply-and-demand structure in which idle cash on the sidelines shrinks while leverage alone expands. If forced liquidations from margin shortfalls become concentrated, index volatility could widen, calling for caution in short-term risk management.

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