Bank of Korea delivers back-to-back rate hikes to cope with inflation
The Bank of Korea (BOK) has implemented two consecutive interest rate hikes to address inflation concerns resulting from robust economic growth. In a decision predicted by 14 out of 22 economists surveyed by Bloomberg, the central bank raised its seven-day repurchase rate by a quarter point to 3% on Thursday. This move marked the BOK's first increase since January 2023, continuing a streak of seven consecutive rate hikes since early 2023.
The bank's decision was prompted by South Korea's export-driven economy benefiting from exceptionally strong demand for semiconductors, driven by the global artificial-intelligence build-out. The BOK also raised its growth forecast for this year and next significantly. Governor Shin Hyun Song will address the board's rationale behind the decision and future expectations during a press conference in Seoul.
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