S. Korea gets historic rate hike to cool prices

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.

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