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The emblem of the Financial institution of Korea is seen in Seoul, South Korea, November 30, 2017. Photograph by Reuters/Kim Hong-Ji
South Korea’s central financial institution on Thursday raised its key rate of interest to the best stage since August 2019 to tame rising inflation, particularly hovering power prices linked to the Ukraine disaster.
The Financial institution of Korea (BOK) raised the borrowing value to 1.5 % — its third hike in lower than a 12 months — after conserving it at a report low for 2 years throughout the coronavirus pandemic.
The most recent resolution comes as Asia’s fourth-largest financial system recovers from a Covid-induced slowdown with a rebound in demand, whereas battling rising gasoline and uncooked materials costs.
“Inflation has accelerated whereas the restoration of the worldwide financial system has considerably moderated, affected by the Ukraine disaster,” the central financial institution mentioned in a press launch.
South Korea’s client costs jumped 4.1 % in March from a 12 months earlier, the quickest tempo in additional than a decade.
Thursday’s coverage assembly had been carefully watched because it got here after the U.S. Federal Reserve raised its rate of interest for the primary time since 2018 to tame costs.
The South Korean central financial institution has hinted at additional fee hikes within the coming months to rein in inflation and surging family debt.
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