Thursday, 09 December 2021 10:22 GMT

S. Korea: Inflation increases interest rates to combat growing costs

(MENAFN) Worries about prices inflation and housing loans have prompted South Korea's central bank to increase interest rates again in 2021.

Statisticians anticipated the Bank of Korea to raise interest rates by a quarter of the proportion point to 1 percent.
That's the newest central bank, as legislators attempt to strike a common ground between the after-pandemic healing process and increasing prices.

The Bank of Korea reported in a declaration that "the Korean economy has continued its sound recovery."
Furthermore, the bank had elevated its inflation forecast to 2.3 percent in 2021 and 2 percent in 2022, implying that more price increases are on the way.

"The Bank of Korea has made clear that its main priority is controlling financial risks amid surging house prices and household debt. The latest data show both are continuing to grow strongly," Alex Holmes, Asia Economics expert at Capitol Economics, echoed this sentiment.


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