Bank of Korea raises rates by a quarter point

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Bank of Korea raises rates by a quarter point

Published: 14 Apr. 2022, 10:25

Acting Monetary Policy Board Chief Joo Sang-yong presides over a meeting in central Seoul Thursday. [BANK OF KOREA]

The Bank of Korea voted to increase rates 0.25 percentage points Thursday as inflation rages globally and central banks elsewhere tighten monetary policy.

It is the second increase of the base rate this year and the fourth in this round of tightening, which began in August 2021.

Rates were taken from the all-time low of 0.50 percent to 0.75 percent in August. That was followed by an increase to 1.0 percent in November and another to 1.25 percent in January.

The base rate is now 1.50 percent.

The meeting took place without a Bank of Korea governor. Former governor Lee Ju-yeol left office in March, and chief nominee Rhee Chang-yong has yet to be confirmed. The monetary policy board on Thursday was presided over by acting board chief Joo Sang-yong.

The decision was made as the U.S. Federal Reserve indicates aggressive rate increases are coming, with the Fed chairman saying last month that short-term interest rates will be increased faster than expected, even if that means disrupting growth and hiring.

U.S. rates were upped 0.25 percentage points in March.

"We're going to be looking at evolving conditions, and if we do conclude that it would be appropriate to move more quickly to remove accommodation, then we'll do so," Fed Chairman Jerome Powell said in March. "That's certainly a possibility as we go through the year."

The Bank of Korea's next monetary policy board meeting is scheduled to take place on May 26.

BY JIN MIN-JI [jin.minji@joongang.co.kr]