The Bank of Korea on Aug. 27 raised the benchmark interest rate by 25 basis points to 3%. Shown are containers stacked at Pyeongtaek Port in Pyeongtaek, Gyeonggi-do Province. (Yonhap News)

By Kang Gahui

For the second straight month, the Monetary Policy Board of the Bank of Korea on Aug. 27 raised the benchmark interest rate by 25 basis points to 3%.

This was the first time for the central bank to raise the rate in consecutive months since the period between April 2022 and January 2023, when it hike the figure seven straight times, and just the fourth instance in the country's history.

The bank on July 16 raised the rate to 2.75%, its first hike in 3 1/2 years, amid an economic rebound thanks to surging semiconductor exports and growing inflation instability because of the conflict in the Middle East. With inflation staying high, it decided to raise the rate again given the possibility that rapid economic growth can accelerate higher prices.

The latest move narrowed the gap between the Korean and U.S. rates from one percentage point to 0.75, the lowest since November 2022. The U.S. figure is between 3.5% and 3.75% on an annual basis.

kgh89@korea.kr