- Title: South Korea lifts interest rates from record low as debt concerns grow
- Date: 26th August 2021
- Summary: SEOUL, SOUTH KOREA (FILE) (REUTERS) EXTERIOR OF BANK OF KOREA SIGN READING (Korean / English): "THE BANK OF KOREA"
- Embargoed: 9th September 2021 04:54
- Keywords: Bank of Korea South Korea coronavirus debt economy interest rate raise
- Location: SEOUL, SOUTH KOREA
- City: SEOUL, SOUTH KOREA
- Country: South Korea
- Topics: Asia / Pacific,Economic Events
- Reuters ID: LVA002ERX09C7
- Aspect Ratio: 16:9
- Story Text: The Bank of Korea (BOK) raised its policy rate for the first time in almost three years on Thursday (August 26) 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 0.75%, 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.
The BOK was the first major Asian central bank to shift away from pandemic-era monetary settings. Policymakers had been signalling 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.
(Production: Yeni Seo, Heejung Jung)
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