Bank of Korea Raises Rates to 2.75% for First Time Since January 2023

The Bank of Korea (BOK) raised its benchmark policy rate by 25 basis points, bringing it to 2.75%. This marks the first rate hike since January 2023, as inflation in South Korea is projected to stay above the BOK's 2% target. Headline inflation rose to 3.2% in June, the highest since 2023. BOK Governor Shin Hyun Song indicated that the currency, the won, has room to strengthen, bolstered by a current account surplus. The rate increase comes amid volatility in South Korea's markets, particularly affecting semiconductor stocks such as Samsung and SK Hynix.