Bank of Korea lifts rate as Government signals more to come

January 14, 2022

SEOUL-- In a rare back-to-back move, the Bank of Korea (BoK) on January 14 lifted its policy rate by 25bps, bringing it back to the pre-pandemic level of 1.25% amid growing concerns about inflation.

The central bank's policy messaging, coupled with the Government's announcement that a supplementary budget is in the pipeline, signalled that the rate-hiking cycle has more room to run.

In an economic note, ANZ Bank says: "We are now pencilling in a 25bp rate hike in Q2. Another back-to-back hike is unlikely, as the BoK has indicated a desire to observe the effects of the hikes made so far." (ATI).