Global Biz

S. Korea's central bank raises key interest rate

(Xinhua)
Updated: 2011-01-13 10:07

SEOUL, Republic of Korea- The Republic of Korea(ROK)'s central bank on Thursday raised its key interest rate by 25 basis points to 2.75 percent for January in a move that defied the general market consensus.

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The hike in the benchmark seven-day repo rate by the Bank of Korea (BOK) marks the third such rate hike since the global economic downturn. The BOK raised the base rate in July and November last year to 2.5 percent from a record-low 2 percent.

Thursday's surprising decision to further raise the key rate despite previous predictions to the contrary is largely seen as the bank's bid to maintain price stability amid rising inflationary pressure.

The BOK said last week that taming inflationary pressure will take center stage in its policy for 2011, vowing to keep the consumer price growth within its 2010-2012 median inflation target set at between 2 percent and 4 percent.