South Korea's exports extended their rapid growth in September, with sustained global artificial intelligence (AI) demand continuing to drive semiconductor shipments, further reinforcing expectations that this export-oriented economy can withstand higher interest rates. Data released by the South Korean government on Thursday showed that, after adjusting for working-day differences, September exports rose 104.9% year-on-year to $120.9 billion, setting a record high. South Korea's exports for the first nine months of 2026 also reached a record $814.5 billion, surpassing $800 billion for the first time. Unadjusted September exports rose 83.5% year-on-year, higher than the revised 68.7% in August; imports increased 26%, and the trade surplus approached $50 billion. Semiconductors remained the main driver of South Korea's export growth, with chip exports surging 263% year-on-year to a record $60.3 billion. Computer exports rose 435%, petroleum product exports rose 72%, while automobile exports fell 5%. The latest data show that South Korea's export momentum remained strong at the end of the third quarter, supporting the Bank of Korea's assessment that the economy can withstand higher interest rates and strengthening the case for further monetary tightening. The Bank of Korea raised its benchmark interest rate by 25 basis points to 3% in August, its second consecutive hike. The Bank of Korea also raised its 2026 economic growth forecast from 2.6% to 3.3%, citing strong exports and investment driven by the global AI buildout. The median of the central bank's six-month interest rate forecast is 3.25%, implying another possible 25 basis point hike.