Bank of Korea hikes key interest rate to 1.25%

Описание: 한은, 기준금리 1.25% 결정... 0.25%p 인상

South Korea's central bank announced another interest rate hike on Friday.
The interest rate has been raised to pre-pandemic levels of 1-point-2-5-percent,... likely in efforts to tame the on-going inflationary pressure.
Kim Sung-min has the details.
The Bank of Korea on Friday pushed up its key interest rate,... bringing the rate back to pre-pandemic levels.
The interest rate is now set at 1-point-2-5 percent,... up 25 basis points from the previous figure.
The rate raise comes only two months after the central bank hiked its key interest rate to 1-percent.
This seemingly hawkish move however has been widely expected among pundits amid growing inflationary pressure.
Consumer prices have been staying above three percent during the previous three months,... far higher than the central bank's target of 2 percent.
Inflation expectations,... the rate at which consumers and businesses expect prices to rise over the course of 2022 also stood at 2-point-6 percent.

Pundits also assume that the global trend of tightening monetary policies influenced the decision.
The rate hike is on par with other major economies... with some speeding up their policy tightening faster than expected.
Recently,... the Federal Reserve strongly hinted at least three rate hikes this year with some expecting four rate rises.

Friday's rate increase however comes amid lingering economic uncertainties,... stemming from the fast-spreading Omicron variant.
Though the country is on a recovery track,... some assume that the hike could disrupt the still fragile recovery trend.
The Bank of Korea says,... a point-2-5 percent rate hike means additional annual interest payments of 2-point-7 billion U.S. dollars.
Kim Sung-min, Arirang News.

#BankofKorea #Economy #interest_rate

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2021-01-14, 12:00 (KST)