Bank of Korea Gov. Shin Hyun-song bangs the gavel to open a Monetary Policy Committee meeting at the central bank in Seoul, South Korea, 16 July 2026. The central bank raised the benchmark rate by a quarter percentage point to 2.75 percent to tackle high inflation amid lingering Middle East uncertainties. Photo by YONHAP / EPA
July 16 (Asia Today) -- The Bank of Korea raised its benchmark interest rate Thursday for the first time in 3 1/2 years and signaled that further increases could follow as inflation, housing prices and household debt remain elevated.
The central bank's Monetary Policy Board unanimously voted to increase the base rate by 0.25 percentage point, from 2.50% to 2.75%.
The decision ended 14 consecutive months without a rate change and effectively reversed the easing cycle that began in October 2024. It was the bank's first rate increase since January 2023.
The board said economic growth was strengthening, led by exports and investment, while inflation was expected to remain above its target for a considerable period. Risks to financial stability also continued, it said.
