Pedestrians cross a road in front of the Bank of Korea headquarters in Seoul on July 16, 2026. <\/p>\n
Jung Yeon-je | Afp | Getty Images<\/p>\n
South Korea’s central bank on Thursday raised rates for a second straight time in its bid to cool rising prices, after core inflation reading hit the highest level last month since December 2023. <\/p>\n
The Bank of Korea hiked rates by 25 basis points to 3%, its highest since January 2025 and in line with expectations. <\/p>\n
The hike comes as core inflation in Asia’s fourth largest economy climbed to 2.6% in July.<\/a> While the headline inflation rate in July had cooled slightly to 2.8%, it has been rising every month since February, when the Iran war started, until June. <\/p>\n In its last meeting,<\/a> the BOK said that it was necessary to “continue a policy stance consistent with further rate hikes,” as elevated cost pressures persist and housing prices continue to accelerate in Seoul and its surrounding areas. <\/p>\n Housing prices in Seoul had jumped 2.5% month on month in June, marking its highest rise in five years, according to South Korean news outlet Asia Business Daily. <\/a><\/p>\n The BOK also noted that export and domestic demand are both expected to show strong growth, supported by the spillover effects of the country’s semiconductor sector.<\/p>\n As such, inflation is forecast to remain above its 2% target level for a considerable time, the central bank said. <\/p>\n