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Central Banks

Bank of Korea Opts For Less Aggressive Battle Against Inflation

  • Governor Rhee goes for smaller hike ahead of Jackson Hole meet
  • Rhee hopes 25 bp hike will also help shore up feeble won
Bloomberg business news
WATCH: The BOK raised its key rate by a quarter-percentage point. Kathleen Oh of BofA Securities shares her views on the central bank’s move.Source: Bloomberg
Updated on

The Bank of Korea raised its key interest rate by a quarter-percentage point on Thursday, returning to its usual pace of tightening as Governor Rhee Chang-yong made clear his view that outsized rate hikes were no longer essential in the battle against inflation.

The central bank increased its seven-day repurchase rate by 25 basis points to 2.5%, in line with the expectations of all economists surveyed by Bloomberg except one who forecast a half-point hike.