Economics

Bank of Korea Raises Benchmark Rate for First Time in a Year

  • Hike expected to ease financial imbalances, Governor Lee says
  • Two board members dissent, voting to keep rate unchanged
Paul Choi, head of Korea research at CLSA, discusses the Bank of Korea’s rate hike and what it means for the economy.(Source: Bloomberg)
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The Bank of Korea raised its key interest rate for the first time in a year, choosing to prioritize heading off financial imbalances despite an uncertain economic outlook.

The decision on Friday to increase the seven-day repurchase rate to 1.75 percent from 1.5 percent was forecast by 14 of 18 economists surveyed by Bloomberg. The remaining four had predicted no change.