The Bank of Korea (BOK) raised its key interest rate by another 25 basis points to 3.50% at today’s meeting, the highest level since late 2008, with the BOK focusing on addressing rising inflation.
Today’s announcement of a 0.25% rate hike was in line with most analysts’ expectations. Many analysts expect the BOK to end the rate hike cycle begun by the central bank in 2021.
The BOK has raised interest rates for the seventh consecutive month since April 2022 to control inflation, which remains high. The consumer price index (CPI) rose 5% in December from a year earlier. This is still above the BOK’s 2% inflation target. The BOK governor will hold a press conference today to explain the decision to raise interest rates.