S Korea central bank raises interest rates by 25 bps, as expected

SEOUL : South Korea’s central bank raised its key interest rate on Thursday in a bid to keep inflation under control and prevent capital outflows as the U.S. Federal Reserve gears up for more hikes.

The Bank of Korea raised its benchmark policy rate by 25 basis points to 2.50 per cent, resuming normal-sized increments after delivering an unprecedented 50 basis point hike in July to curb inflation now at an almost 24-year high.

All but one of the 36 analysts in a Reuters poll expected the bank to go for the quarter-point hike, while one expected a half-point hike.

Governor Rhee Chang-yong will hold a news conference at 0210 GMT.