USD/KRW jumps towards 1,170 after BOK hikes key rate by 25bps to 0.75%, first hike since Nov 2018
|The Bank of Korea (BOK), the South Korean central bank raised the base rate by 25 bps to 0.75%, marking it the first-rate hike since November 2018.
The BOK became the first major Asian central bank to hike interest rates since the coronavirus pandemic began.
The central bank embarked upon its tightening journey almost after three years to stem the surge in household debt.
Key highlights from the statement summary
Sees 2022 growth at 3.0%.
Sees 2021 growth at 4.0% vs 4.0% before.
S. Korea inflation to run above previous forecast.
Economy to sustain growth.
Exports growth to be sustained.
S. Korea core inflation to run at low-1% range.
Household debt growth accelerated
Build-up of financial imbalances.
Pace of growth and inflation.
To monitor coronovirus spread.
To adjust degree of policy easing as growth, inflation to be sustained.
Market reaction
In an initial reaction to the BOK rate hike, USD/KRW jumped to daily highs of 1,168.07, where it now wavers. The pair is up 0.33% on the day.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.