South Korea announces second successive rate hike
Domestic economy continues to post stronger-than-expected growth, backed by strong exports and recovering demand.
South Korea's central bank, the Bank of Korea, increased interest rates for the second consecutive time on Thursday, raising the base rate from 2.75% to 3.0%. This marks the first rate hike in over three years. The decision was made after the central bank observed strong economic growth, driven by robust exports and a recovery in domestic demand.
Despite the rate hike, the bank warned that inflation would likely remain elevated due to higher energy costs resulting from the Middle East crisis. Inflation in July climbed 2.8% year-on-year, slightly lower than the previous month's increase but still well above the bank's 2% target. The Bank of Korea also upgraded its economic growth forecasts for this year to 3.3% and for next year to 2.9%, compared to their May predictions of 2.6% and 2.1% respectively.
The strong performance of South Korea's chipmakers, Samsung Electronics and SK hynix, was a key factor in the nation's economic growth.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Bank of Korea delivers back-to-back rate hikes as price pressures persist nst.com.my
- South Korea announces second successive rate hike freemalaysiatoday.com
- South Korea announces second successive rate hike straitstimes.com
