South Korea’s Fifth 25-Basis Point Central Bank Interest Rate Hike since August

May 26, 2022

The Bank of Korea’s seven-day bank rate was raised again by 25 basis points. It was the fifth such increase since last August, the third one of 2022, and the second straight monthly meeting in which officials tightened. At 1.75%, the interest rate is back to the level prevailing between July and October of 2019. A released statement revises projected average CPI inflation this year up sharply to 4.5% from 3.1%. Inflation printed at 4.8% in April and is headed for the high 5% range later this year, but core inflation is hovering around 3%. The reduction of inflation going forward will command the central bank’s top priority “for some time.” Like the Fed, incremental increases of the interest rate may need to be stepped up.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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