South Korea raises interest rates

South Korea’s central bank has put up interest rates for the second time this year amid concerns over higher prices and rising household debt.

 

The Bank of Korea’s quarter of a percentage point hike to 1% was widely expected by economists.

 

It is the latest central bank to make such a move as policy makers try to balance the post-pandemic recovery and rising inflation.

 

New Zealand raised rates for the second time in as many months on Wednesday.

 

“The Korean economy has continued its sound recovery,” the Bank of Korea said in a statement.

 

“The Board will continue to conduct monetary policy in order to sustain the recovery of economic growth and stabilize consumer price inflation at the target level over a medium-term horizon, while paying attention to financial stability,” it continued.

 

The bank also raised its inflation outlook to 2.3% for this year and 2% for 2022, suggesting further rate hikes to come.

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