Bank of Korea unexpectedly raise interest rates by 25 basis points against inflation

 NetEase Finance Jan. 13 News South Korean central bank unexpectedly hiked interest rates today, the benchmark interest rate by 0.25 percentage point to 2.75%. This is the Korean central bank in July last year and 11 months later, once again raised the benchmark interest rate, designed to control the inflation with the economic recovery comes.

Korean market had expected the central bank will keep interest rates unchanged.

the morning of the Bank of Korea Monetary Policy Committee held regular meetings that, as international raw material prices and rising domestic wages, expanding domestic demand, agricultural and marine products prices pushed up overall consumer prices surge, South Korea is facing increasing inflationary pressure , the central bank therefore decided to raise the benchmark interest rate.


Bank of Korea expects South Korea's consumer price index from 2.9% in 2010 to 3.5%. With consumer prices further spread of psychological unease, the Bank of Korea raised the benchmark for future interest rates is likely to continue to ease inflationary pressures.

South Korean government yesterday announced new jobs in December rose to seven-month high, making the market believe that unless the shot, or demand-driven inflation will heat up. South Korean President Lee Myung-bak South Korea last week also urged the cabinet to take tough measures to make the inflation rate remained at about 3% level. South Korean central bank set the target level of inflation of 2-4%.

by the international financial crisis, since the second half of 2008, the central bank benchmark interest rate gradually decreased from 5.25% to 2% low. However, due to the strong momentum of economic recovery and rising inflationary pressures, the Bank of Korea was in July 2010 and November of each benchmark interest rate twice by 0.25 percentage points.

(This article Source: NetEase Finance)