Central Bank Announces Interest Rate Hike "Within This Year"

Graph: Baseline interest rate set by the Bank of Korea since 2008.  Credit: Website of the Bank of Korea.

In the announcement on June 24, the Bank of Korea 한국은행 made the most specific declaration to date that it would raise the baseline interest rate, which is currently at 0.5% after a steady decrease that began from mid-2019.

Lee Ju-yeol 이주열, president of the Bank of Korea, noted the need to “normalize the monetary policy in an orderly way within this year, before too long,” pointing to the “financial imbalance” that featured a rush of liquidity into asset markets and a rise in household debt.

Meanwhile, South Korea’s KOSPI index set a new intraday record on June 25, climbing over 3,300 for the first time. The index gained 14.9% year to date.