Bank of Korea lifts borrowing costs by 25 basis points to 1 percent.

South Korea’s central bank raised interest rates and revised its inflation outlook on Thursday, as widely expected, as concerns about rising household debt and prices pointed to further policy tightening next year.

The Bank of Korea’s monetary policy board raised borrowing costs by 25 basis points to 1 percent – a move expected by 29 of 30 analysts in a Reuters poll. One analyst saw the bank raising interest rates by 50 basis points to 1.25 percent.

It also raised its inflation outlook for next year to 2 percent from 1.5 percent previously, suggesting the need for further rate hikes amid concerns about faster and more protracted price pressures.

The three-year treasury bond

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