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MNI BRIEF: Bank of Korea Raises Policy Rate By 25bp to 2.50%

(MNI) Tokyo

The Bank of Korea raised its policy interest rate to 2.50% from 2.25% on Thursday, matching wider expectations, as it looks to fight elevated inflationary pressure.

The 25-basis point hike represented a step down from the 50-basis point hike deployed in July.

In terms of its updated economic projections, the BoK raised its CPI forecast for 2022 to 5.2% Y/Y from the 4.5% seen previously. Meanwhile, the Bank’s 2023 CPI forecast was lifted to 3.7% Y/Y from 2.9% previously.

The Bank also trimmed its GDP growth expectations, now looking for GDP to grow by 2.6% in 2022, from 2.7% previously, followed by growth of 2.1% in 2023, which compares to a prior estimate of 2.4%.

The Bank’s next policy-setting meeting is scheduled to take place on Oct. 12.

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
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MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
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