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2026-07-16 09:04:11
[Bank of Korea Raises Rates for First Time in Three and a Half Years, Shifting Towards Tightening to Combat Inflationary Pressures] (1) In response to inflationary pressures stemming from the US-Iran conflict, the Bank of Korea has joined the global tightening trend, raising its benchmark interest rate for the first time in three and a half years. (2) The central bank raised its seven-day repo rate by 0.25 percentage points to 2.75%, after maintaining it at 2.50% since May 2025 (when it ended its easing cycle and completed its final rate cut). (3) This rate hike is in line with market expectations (all 25 economists surveyed predicted a rate hike in July), and the central bank governor has repeatedly signaled tightening since the May meeting, with the current inflation rate still far above the 2% target level.
