Bank Of Korea Hikes Policy Rate For First Time Since 2023
(RTTNews) - The Bank of Korea raised its benchmark interest rate for the first time since 2023 on Thursday as inflation is projected to stay above 2 percent target for a considerable time.
The Monetary Policy Board of the Bank of Korea unanimously decided to hike the base rate by 25 basis points to 2.75 percent.
The bank raised its interest rate for the first time since January 2023. Today's decision came in line with expectations.
"Along with economic growth having strengthened, led by exports and investment, inflation is expected to remain above the target level for a considerable time, and financial stability risks also persist," the bank said in a statement.
In June, inflation rose to a 30-month high of 3.2 percent, driven by the sharp rise in oil prices, while core inflation remained unchanged at 2.5 percent.
Consumer price inflation is expected to be generally consistent with the May forecast of 2.7 percent. Meanwhile, core inflation is forecast to be somewhat higher than the previous projection of 2.4 percent.
Further, stronger domestic economic growth supported today's decision. The economy strengthened further as exports and investment continued to grow strongly. Economic growth for this year is expected to considerably exceed the May forecast of 2.6 percent.
"The outlook remains subject to considerable uncertainty, particularly regarding geopolitical developments in the Middle East and the sustainability of global AI investment," the bank said.
South Korea Consumer Prices Rise 0.2% In August
South Korea Manufacturing Sector Ebbs In August - S&P Global
South Korea August Trade Surplus #34.75 Billion
South Korea Industrial Output Rises 0.2% In July
Bank Of Korea Hikes Key Rate For Second Straight Time
South Korea Producer Prices Sink 0.4% In July
South Korea Export Prices +0.1% On Month, +49.1% On Year In July
