SEOUL :South Korea’s central bank raised interest rates for the second time since the pandemic began and revised up its inflation outlook on Thursday as concerns about rising household debt and consumer prices grew.
The Bank of Korea is expected to continue its policy tightening cycle with rates tipped to reach 1.50per cent by the end of 2022, raising concerns about whether households will be able to service their debt repayments.
The BOK’s monetary policy board lifted borrowing costs by 25 basis points to 1.00per cent – a move expected by 29 of 30 analysts in a Reuters poll.
BOK Governor Lee Ju-yeol said a rate hike in the first quarter of next year is possible, which would be ahead of South Korea’s March presidential election. Lee Jae-myung, the ruling party’s presidential candidate, has warned of a potential collapse in the housing market as interest rates rise, with Seoul home prices roughly doubling over the past five…