Inflation High and Financial Risks Remain, Bank of Korea Raises Rates for Second Straight Time to Three-Year High

South Korea's central bank announced on Thursday a 25-basis-point hike in its benchmark rate to 3%, marking the second consecutive increase, to address robust economic growth and persistently high inflation pressures. One of the seven monetary policy committee members voted to hold rates steady. The bank also sharply raised its 2026 GDP growth forecast to 3.3%. It specifically flagged financial stability risks, including consecutive rises in Seoul apartment prices and household debt expansion.