Bank of Korea Delivers Back-to-Back Rate Increase
South Korea’s central bank also projected stronger growth this year.
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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