BreakingBOK raises benchmark rate to 3% as inflation woes persist
Bank of Korea (BOK) Gov. Shin Hyun-song bangs the gavel to open a Monetary Policy Board meeting at the central bank in Seoul, Thursday. Courtesy of BOK
The Bank of Korea (BOK) on Thursday raised its benchmark interest rate by 0.25 percentage point to 3 percent, delivering a second consecutive hike as inflationary pressures persist amid Middle East uncertainties.
The BOK also raised its 2026 growth forecast to 3.3 percent from the 2.6 percent projection announced in May, as robust semiconductor exports continued to support the economy.
The central bank's Monetary Policy Board voted to raise the benchmark rate for a second straight meeting following its July hike.
BOK Gov. Shin Hyun-song had previously signaled further tightening amid concerns over inflation, with stronger-than-expected economic growth strengthening the case for a rate hike.
The preliminary data for second-quarter growth showed the economy expanded 0.6 percent, well above the BOK's 0.2 percent forecast issued in May. Core inflation rose 2.6 percent in July, marking its fastest increase since December 2023, when it stood at 2.8 percent.