BOK's rate hike clock speeds up amid oil-fueled inflation pressure

The Bank of Korea (BOK) faces mounting pressure for further monetary tightening as a spike in global oil prices triggered by conflict in the Middle East fuels inflation and pushes up the won-dollar exchange rate.

Market analysts increasingly expect the central bank to resume rate hikes in the second half of the year.

BOK Gov. Shin Hyun-song is set to chair a Monetary Policy Board meeting on Thursday, his first since taking office in April, with markets closely watching for signals on his policy direction.

The central bank has kept its benchmark interest rate unchanged for seven consecutive meetings after cutting it to 2.50 percent in May last year.

The bank is widely expected to keep rates unchanged at the upcoming meeting, while signaling the possibility of future rate hikes. "In our base case, we expect BOK to deliver an evidently hawkish hold decision at 2.50 percent policy rate at the meeting," said Kim Jin-wook, chief economist at Citibank Korea.

Surging oil prices and the won's sharp decline against the dollar are adding to inflation concerns and reinforcing expectations of monetary