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Bank of Korea hikes key interest rate to 1%
Updated: 2021-11-25 12:06:11 KST
South Korea's central bank has hiked its key interest rate to one percent, up 25 basis points amid rising inflationary pressure.
The hike comes only three months after the central bank raised its key interest rate to point-seven-five percent.
And this also marks the first time since March last year that the rate has risen back to the 1-percent mark.
The Bank of Korea had been keeping its key interest rate below 1-percent to weather the economic impact of the pandemic.
The central bank's monetary policy meeting on Thursday came up with the decision mainly in response to rising inflation.
Consumer prices in South Korea saw their biggest jump in almost 10 years last month, up 3.2 percent on-year.
It was the first time that the Consumer Price Index has gone above three percent since 2012, and is far higher than the government's target of 2 percent.
Experts say that rising household debt also made the hike inevitable.

"also because a lot of people seem to be trying to get loans while the interest rate is still low so if you wanted to control the household debt we had to raise the interest rate multiple times as quickly as possible."

The country's household debt in the third quarter of this year came to around 1.6 trillion U.S. dollars.
But the central bank has maintained its previous economic growth forecast for the country.
It projected on Thursday a four percent growth rate in GDP for 2021 and 3 percent next year, the same as the previous forecast made in May, likely due in part to the country's robust exports.
Kim Sung-min, Arirang News.
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