STORY: South Korea hasn’t escaped the global surge in inflation.
Price rises there are running at 24-year highs.
Now the country is getting an unprecedented rate hike in response.
On Wednesday (July 13) the central bank lifted its benchmark rate by half a percentage point.
That’s the biggest increase since it adopted its current policy system in 1999.
Governor Rhee Chang-yong said the move wasn’t made lightly:
“The Bank of Korea decided to implement monetary policy by raising the base rate by 50 basis points from 1.75% to 2.25%. There was a case of cutting 50 basis points at once before, but this is the first time we’re raising 50 basis points, so I would like to tell you that the decision was made with a heavy sense of responsibility.”
The increase keeps the Bank of Korea at the forefront of global monetary tightening.
Last month saw the U.S. Federal Reserve raise rates by three-quarters of a percentage point.
Central banks in Canada and New Zealand are among the latest to follow suit.