The Bank of Korea (BOK) has released today its decision about the borrowing costs, where the Bank increased its benchmark interest rates by 25 basis points to 3.25% during June, from 3.00% a month earlier, while the expectations referred to 3.00%.
The Bank of Korea raised interest rates for a third time during the first six months of the year, as the Bank aims to contain inflation risks that has exceed the government's target, while the Bank wanted to curb record household debt.
Consumer prices rose 4.1% in May from a year earlier, the fifth-straight month it exceeded the central bank's target of 2% to 4% through 2012. Core inflation excluding volatile food and energy items accelerated to a two-year high of 3.5% in May.
On the other hand, the Bank sees the currency appreciation the Won is working to curb inflation rates along with the increases rates.