Bank of Korea raises base interest rate

South Korea’s central bank has raised its policy interest rates by 25 basis points to 0.75 percent, citing continued sound economic recovery despite a slowdown in private consumption following a resurgence of COVID infections, Report informs referring to the ICIS (Independent Commodity Intelligence Services).

This is the first time in nearly three years that the Bank of Korea (BoK) has tightened its monetary policy, noting that “exports have sustained their buoyancy and facilities investment has shown a robust trend.”

The BoK maintained its full-year 2021 GDP forecast of around 4 percent, with inflation seen higher at the lower 2 percent level from its previous projection of 1.8 percent.

South Korea’s economic growth on a year-on-year basis accelerated to 5.9 percent in the June quarter from 1.9 percent in the first three months of 2021.

Of the 34 economists and market analysts polled by The Wall Street Journal ahead of the decision, 18 had forecast a rate increase in August, while 16 had expected the bank to delay it until October or November, according to MarketWatch.