Central Banks
Bank of Korea’s Rhee Warns of Slower Growth After Outsized Hikes
- Rhee raises rates by 50 bps after smaller increase in August
- Decision shows influence of Fed on global central banking
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Bank of Korea Governor Rhee Chang-yong acknowledged the difficulty of sticking with outsized interest rate hikes to battle inflation and support the currency after the central bank’s latest move prompted dissent within his board.
The South Korean central bank narrowed the policy gap with the Federal Reserve earlier Wednesday by raising its seven-day repurchase rate by a half-percentage point to a 10-year high of 3%, as expected by 16 of 19 economists surveyed by Bloomberg. The remaining three had forecast a quarter-point move.