Bank of Korea Raises Rate to 2.75% as AI Chip Boom Fuels Inflation

3 articles · Updated · Bloomberg · Jul 13

A unanimous Bank of Korea decision lifted the seven-day repurchase rate by 25 basis points to 2.75%, the first increase since January 2023.
The bank tied the move to faster-than-expected growth and sticky inflation, with an AI-driven semiconductor boom strengthening the economy.
Thursday’s increase signals a new tightening cycle after four rate cuts since late 2024, and policymakers indicated further hikes remain possible.
The shift comes as inflation reached 3.2% in June and the won hovered near a 17-year low against the dollar, adding pressure on policymakers.

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Bloomberg4d ago

Bank of Korea Raises Rate to 2.75% Amid Chip Boom, First Hike Since 2023

CNBC1d ago

Bank of Korea Hikes Policy Rate to 2.75%, First Since January 2023

en.sedaily.com4d ago

Bank of Korea Unanimously Expected to Hike Rate by 0.25% This Month

5 Sources

Can Korea's rate hikes stabilize the won without derailing its AI-driven growth?

Will this rate hike cool Seoul's property market or just squeeze indebted families?

Are interest rate hikes the right tool to fight inflation driven by global oil shocks?

South Korea’s Imminent 0.25% Rate Hike: Inflation, Market Reactions, and Policy Risks

Overview

The Bank of Korea is widely expected to raise its policy rate by 0.25 percentage points on July 16, 2026, with financial markets pricing in over a 90% chance of this move. This anticipated rate hike is driven by persistent inflation, as South Korea’s Consumer Price Index has stayed above the central bank’s 2% target for five consecutive months, reaching 3.2% year-on-year in June. Robust economic growth and rising concerns over financial stability further support the need for action. The sustained elevation in prices highlights the urgency for the central bank to tighten policy and maintain economic stability.

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