Bank of Korea

April 14, 2022

Officials at the Bank of Korea today authorized the fourth 25-basis point hike of South Korea’s repo rate since last August. Analysts were not expecting an increase, and none had been made at the previous meeting in February. The new rate level of 1.5% is it’s highest since August 2019. CPI inflation in South Korea has climbed from minus 0.3% in May 2020 to 1.5% in March 2021 to 4.1% last month, double the long-term target, and officials do not anticipate a return to target “for a considerable time” according to a statement released today. Economic recovery is continuing, and “the Board will judge when to further adjust the degree of accommodation while thoroughly assessing developments related to COVID-19, the risk of a buildup of financial imbalances, monetary policy changes in major countries, geopolitical risks, and the trends of growth and inflation.”

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