S Korea lifts interest rates from record low as debt concerns grow
SEOUL : The Bank of Korea raised its policy rate for the first time in almost three years on Thursday, becoming the first major Asian central bank to shift away from pandemic-era monetary settings as surging household debt created new threats for the economy.
The BOK’s monetary policy board raised the benchmark interest rate 25 basis points to 0.75per cent, as expected by 16 of 30 analysts surveyed by Reuters.
The benchmark KOSPI fell sharply after the rate decision, while the South Korean won strengthened.
Policymakers had been signaling higher rates since May but expectations for a hike were pared recently due to South Korea’s latest COVID-19 outbreak, which has forced Asia’s fourth-largest economy into semi-lockdown.
Central banks around the world are laying the groundwork for a transition away from crisis-era stimulus as what began as emergency support for collapsing growth now overheats many economies.
Most central banks that…
