Citigroup analysts predict the Bank of Korea will raise its policy rate to 3% this year as surging global oil prices push inflation higher. The forecast comes amid growing concerns about inflationary pressures on the Korean economy, with energy costs playing a major role in driving price increases.

Citigroup Inc.'s projection suggests a more aggressive monetary policy stance than previously anticipated, potentially signaling the central bank's concern about inflation risks. The move would represent a significant shift in South Korea's monetary policy, as higher rates could impact borrowing costs and economic growth.

The Bank of Korea has been monitoring inflation closely, and this forecast from one of the world's major financial institutions adds weight to expectations of monetary tightening. Rising oil prices have already contributed to increased costs across various sectors, potentially forcing policymakers to act more decisively to maintain price stability.