Business News Asia
The Bank of Korea (BOK) raised its key interest rate by 0.25% to 1.75%, the first two-month rate hike in nearly 15 years, to stave off the current surge in inflation.
Earlier, on April 14, the South Korean central bank raised the key interest rate by 0.25% to 1.5%.
South Korean authorities have been working to curb rising inflation. Prices for oil and other commodities have risen following the war between Russia and Ukraine and global supply chain problems.
South Korea’s consumer price index (CPI) rose by 4.8% in April, the strongest growth since October 2008.
In the past, the South Korean central bank has given top priority to fighting inflation, despite concerns that raising interest rates would increase borrowing costs and hurt the economy.
South Korea’s central bank was also pressured to raise interest rates after the Federal Reserve raised rates by 0.50% to 0.75-1.00% at its May meeting. It also signaled that it would raise rates again to curb inflation.