Bank of Korea delivers back-to-back rate hike to curb inflation risks

Published Thu, Aug 27, 2026 · 09:38 AM

THE Bank of Korea raised its benchmark interest rate at a second consecutive meeting, moving to contain inflation risks fuelled by stronger-than-expected economic growth amid an unprecedented semiconductor boom.

The central bank increased its seven-day repurchase rate by a quarter point to 3 per cent on Thursday, a move predicted by 14 of 22 economists surveyed by Bloomberg. Authorities also had conducted a quarter-point increase in July, the BOK’s first hike since January 2023.

The central bank last raised rates at consecutive meetings in early 2023, capping a run of seven straight hikes.

The decision comes as South Korea’s export-driven economy powers ahead on exceptionally strong demand for semiconductors tied to the global artificial-intelligence build-out. In addition to tightening policy, the BOK raised its growth forecast for this year and next substantially.

Governor Shin Hyun Song is scheduled to hold a press conference from around 11.10 am in Seoul, where he’ll explain the board’s thinking behind the decision and shed light on his expectations for what lies ahead. BLOOMBERG