Bank of Korea Raises Benchmark Rate by 0.25pp to 2.75% on July 16, First Hike in 3.5 Years

According to the Bank of Korea, on July 16, the central bank raised its benchmark rate by 0.25 percentage points to 2.75% for the first time in three and a half years. All seven monetary policy committee members voted unanimously for the increase. The decision marks the beginning of a new tightening cycle, with the committee signaling in its resolution that "future monetary policy will need to continue raising rates." The hike was driven by persistent inflation pressures and financial stability concerns, following consecutive months of consumer price growth in the 3% range and a 20.6% year-over-year surge in import prices.
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