S. Korea raises interest rate to 1.25%, pre-pandemic level

Economy

South Korea's central bank raised its key interest rate to 1.25 percent, its pre-pandemic level, on Friday amid growing concerns over inflation. The decision to lift the benchmark rate by 0.25 percentage point, the third hike in five months, comes amid a sharp rise in housing prices, while low interest rates have caused a surge in household debts. In March 2020 the Bank of Korea cut the key rate to 0.75 percent and to a record low of 0.5 percent in May that year to tackle the economic fallout caused by the coronavirus pandemic. South Korea's consumer price index rose 3.7 percent in December fr...

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