SEOUL — The Bank of Korea is taking a cautious approach to additional interest-rate increases, with a board member saying the central bank will assess both domestic and international economic conditions before deciding the timing and pace of further tightening.

Board member Kim Jong-hwa said the effects of the previous two rate increases would be closely examined before any additional move is considered.

The central bank is also watching inflation closely. Kim said price pressures could remain above the Bank of Korea’s target for a considerable period, with developments linked to the Middle East conflict and strong export activity among the factors influencing the outlook.

South Korea’s economy has benefited from strong semiconductor exports, supported in part by continuing investment in artificial intelligence. The Bank of Korea expects global AI-related investment to remain significant as demand for advanced technology grows.

The central bank raised its benchmark interest rate by 25 basis points last month to 3.00%, marking the second consecutive increase as inflation remained above target and financial-stability concerns persisted.

The latest comments suggest policymakers are not committing to an automatic series of additional hikes. Instead, officials are expected to evaluate incoming economic data and the impact of earlier policy decisions before determining their next step.

Higher interest rates can help contain inflation but may also increase borrowing costs for households and businesses. For South Korea, policymakers must therefore balance price stability with economic growth and financial stability.

The country’s export sector remains an important part of that calculation. Continued strength in semiconductor demand could support growth, while persistent inflation could increase pressure on policymakers to maintain a tighter monetary stance.

The Bank of Korea’s latest position therefore points to a data-dependent approach rather than a predetermined path for interest rates. Future decisions are likely to depend heavily on inflation, economic growth, financial conditions and developments in the global economy.