The benchmark interest rate, which fell to the 0% range last year in the aftermath of the Corona 19, rose to the 1% level again for the first time in 20 months.
It means that the "era of ultra-low interest rates" led by the Bank of Korea for one year and eight months by releasing money to defend the economy has come to an end.
The Bank of Korea Monetary Policy Committee (hereinafter referred to as the Monetary Policy Committee) raised the base rate by 0.25 percentage points from the current 0.75% per annum to 1.00% at the Monetary Policy Direction Meeting today (25th).
On March 16 of last year, the MPC made a so-called 'big cut' (1.25% → 0.75%) of lowering the base interest rate by 0.5 percentage points at a time when an economic recession was expected due to the impact of Corona 19, and on May 28, an additional cut (0.75% → 0.5) %) quickly cut interest rates by 0.75 percentage points in two months.
Since then, the base rate has been frozen nine times in July, August, October, and November of last year and in January, February, April, May and July of this year, and finally increased by 0.25 percentage points in August for the first time in 15 months. added.
The fact that the MPC raised the key interest rate by 0.5 percentage points for the first time in three months is a side effect of the release of a lot of money in the market. because of.
In addition, it is interpreted that the BOK's perception and outlook that 'the economic recovery is strong enough to be able to collect a little bit of money from the market now' is reflected in the base rate hike.
The gap with the US Federal Reserve's base rate (0.00-0.25%) widened to 0.75-1.00 percentage points due to the rate hike.Keywords: