Fed rate hike puts BOK under pressure over further rate increase
The Bank of Korea (BOK) is facing growing expectations of another rate hike before the end of the year after the U.S. Federal Reserve raised its policy rate by 0.25 percentage points in its first hike since July 2023, widening the interest rate gap between Seoul and Washington to 1 percentage point, analysts said Thursday. While persistent inflationary pressures continue to warrant monetary…
The Bank of Korea (BOK) is anticipating a potential further interest rate increase before the year's end following the Federal Reserve's recent 0.25 percentage point rate hike in the U.S., widening the interest rate differential between the two countries to 1 percentage point. Inflation remains a concern, but the increasing disparity in interest rates and the volatility in Seoul's housing market are also seen as catalysts for an additional rate hike.
However, the BOK may choose to ease the tightening tempo, considering it has already raised rates twice in July and August to combat domestic inflation, housing market overheating, and anticipated tighter U.S. monetary policy. The central bank might instead monitor the effects of these measures and limit the strain on financially struggling households and small businesses.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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