BOK hikes key rates by 25bps to pre-pandemic level of 1.25%

The Bank of Korea (BOK) hiked the benchmark interest rates for the second straight meeting in January 2022.

The first meeting of this year saw the central bank raising the base rate by 25bps to 1.25%, bringing it to the pre-pandemic level.

Key takeaways from the Summary

S. Korea economic growth path in line with BOK’s earlier projection.

Exports growth to sustain favorable momentum.

Private consumption improvement to strengthen.

To monitor monetary policy changes abroad.

Consumer price inflation to exceed path expected earlier for some time.

To monitor build-up of financial imbalances.

To monitor covid-19 developments.

To monitor pace of growth, inflation.

Consumer price inflation to run above mid-2%.

Household debt growth slowed somewhat.

Core inflation to increase considerably above 2%.

Rise in housing prices has eased.

Consumer inflation to stay in the 3%-range for a while.

Market reaction

USD/KRW spikes to daily highs of 1,189.53 on the expected BOK rate hike, extending the previous recovery.

The spot was last seen trading at 1,189, up 0.20% on a daily basis.

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