South Korea’s central bank hikes rate for 1st time since 2023 to curb inflation, debt

South Korea’s central bank raised its key interest rate from 2.5% to 2.75% for the first time since January 2023 to address inflation driven by the Middle East conflict and energy costs, as well as high household debt. The decision followed stronger-than-expected economic growth fueled by semiconductor exports linked to global AI demand, prompting the government to revise its 2026 growth forecast upward to 3%.