{"id":8579,"date":"2026-07-17T11:17:40","date_gmt":"2026-07-17T06:17:40","guid":{"rendered":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=8579"},"modified":"2026-07-17T11:17:40","modified_gmt":"2026-07-17T06:17:40","slug":"bank-of-korea-raises-rate-signals-further-tightening","status":"publish","type":"post","link":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=8579","title":{"rendered":"Bank of Korea raises rate, signals further tightening"},"content":{"rendered":"<p><script>\r\n  atOptions = {\r\n    'key' : '644b717812d811d6a1c1fc5b6ccd6fa6',\r\n    'format' : 'iframe',\r\n    'height' : 90,\r\n    'width' : 728,\r\n    'params' : {}\r\n  };\r\n<\/script>\r\n<script src=\"https:\/\/www.highperformanceformat.com\/644b717812d811d6a1c1fc5b6ccd6fa6\/invoke.js\"><\/script>\r\n<br \/>\n<br \/><img decoding=\"async\" src=\"https:\/\/cdnph.upi.com\/ph\/st\/th\/9471784238480\/2026\/upi_com\/f474b6bb3fe8f51634bc79b9a6db2f11\/v1.5\/Bank-of-Korea-raises-rate-signals-further-tightening.jpg\" \/><\/p>\n<p>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<\/p>\n<div id=\"\">\n<p><span class=\"story_dl\">July 16 (Asia Today) &#8212;<\/span> 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.<\/p>\n<p>The central bank&#8217;s Monetary Policy Board unanimously voted to increase the base rate by 0.25 percentage point, from 2.50% to 2.75%.\n<\/p>\n<p>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&#8217;s first rate increase since January 2023.<\/p>\n<p>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.<\/p>\n<p>Stronger-than-expected economic growth reduced concerns that higher borrowing costs would place excessive pressure on the economy.<\/p>\n<p>Bank of Korea Gov. Shin Hyun Song said the bank&#8217;s previous 2.6% growth forecast for 2026 now appeared too low.<\/p>\n<p>&#8220;Our current assessment is that 2.6% is far too low,&#8221; Shin told reporters. He said the forecast could be revised substantially higher when the bank releases its next economic outlook in August.\n<\/p>\n<p>The bank expects second-quarter growth to exceed its earlier projection of 0.2% from the previous quarter.<\/p>\n<p>South Korean exports surpassed $100 billion for the first time in June, driven by strong global demand for semiconductors.<\/p>\n<p>The bank expects the semiconductor boom to spread beyond exports by increasing corporate earnings, investment, wages and tax revenue, supporting a recovery in domestic demand.<\/p>\n<p>The semiconductor upturn, however, could also add to demand-side inflationary pressure.<\/p>\n<p>Real gross domestic income rose considerably faster than output in the first quarter as higher semiconductor prices improved South Korea&#8217;s terms of trade. The increase indicates that gains from the chip industry are generating income that could flow into consumption and investment.<\/p>\n<p>Shin said observers should pay closer attention to semiconductor prices than to the share prices of chipmakers when assessing their broader effect on the economy.<\/p>\n<p>The central bank said international oil prices had declined from recent peaks but warned that earlier increases in energy costs and the effects of the exchange rate could gradually spread to prices for goods and services.<\/p>\n<p>Consumer prices rose 3.2% in June from a year earlier after increasing 3.1% in May, remaining above the bank&#8217;s 2% inflation target for a second consecutive month.\n<\/p>\n<p>Core inflation stood at 2.5% while an index measuring frequently purchased goods and services remained in the mid-3% range. Short-term inflation expectations stayed in the upper-2% range.<\/p>\n<p>Rising home prices in the Seoul metropolitan area, growing household loans and volatility in the won also influenced the rate decision.<\/p>\n<p>Shin said the bank would continue responding until it was confident that inflation was moving sustainably toward its target.<\/p>\n<p>He declined to commit to a predetermined timetable for another increase, saying future decisions would depend on incoming economic data.<\/p>\n<p>&#8220;We are keeping all possibilities open,&#8221; Shin said.<\/p>\n<p><i>&#8212; Reported by Asia Today; translated by UPI<\/i><\/p>\n<p><i>\u00a9 Asia Today. Unauthorized reproduction or redistribution prohibited.<\/i><\/p>\n<p><i>Original Korean report: <a href=\"https:\/\/www.asiatoday.co.kr\/kn\/view.php?key=20260716010006185\" target=\"_blank\">https:\/\/www.asiatoday.co.kr\/kn\/view.php?key=20260716010006185<\/a><\/i><\/p>\n<\/p><\/div>\n<script async=\"async\" data-cfasync=\"false\" src=\"https:\/\/pl30214220.effectivecpmnetwork.com\/9ab3d4df8a7e1a6171e16ddbf732cc19\/invoke.js\"><\/script>\r\n<div id=\"container-9ab3d4df8a7e1a6171e16ddbf732cc19\"><\/div>\r\n\n","protected":false},"excerpt":{"rendered":"<p>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 \/&#8230;<\/p>\n","protected":false},"author":1,"featured_media":8580,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/cdnph.upi.com\/sv\/ph\/og\/upi_com\/9471784238480\/2026\/1\/f474b6bb3fe8f51634bc79b9a6db2f11\/v1.5\/Bank-of-Korea-raises-rate-signals-further-tightening.jpg","fifu_image_alt":"","footnotes":""},"categories":[4],"tags":[],"class_list":["post-8579","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-hub"],"brizy_media":[],"_links":{"self":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/8579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8579"}],"version-history":[{"count":0,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/8579\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/media\/8580"}],"wp:attachment":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}