▲ Bank of Korea (BOK) Gov. Shin Hyun-song (C) presides over a Monetary Policy Board meeting at the central bank in Seoul on May 28, 2026. (Pool photo) (Yonhap)

SEOUL, July 16 (Yonhap) -- South Korea's central bank delivered a quarter-percentage-point interest rate hike Thursday, as widely expected, to tackle high inflation amid lingering Middle East uncertainties.

The Bank of Korea (BOK) convened a Monetary Policy Board meeting and lifted the benchmark rate from 2.5 percent to 2.75 percent.

This marked the first rate increase since January 2023, when the central bank hiked the rate by 0.25 percentage point to 3.5 percent as part of its policy normalization to jumpstart the pandemic-hit economy.

The BOK began monetary easing in October 2024 and has cut the benchmark interest rate by a cumulative 100 basis points from 3.5 percent to support economic growth. It had kept the rate unchanged since July 2025.

The rate hike was widely expected after the BOK signaled a hawkish shift in recent weeks to combat mounting inflationary pressure. At its previous rate-setting meeting in May, the central bank left the benchmark rate unchanged for the eighth consecutive meeting.

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