To cope with inflationary pressure caused by the US-Iran conflict, the Bank of Korea raised the benchmark interest rate for the first time in three and a half years to join the ranks of the global tightening of monetary policy. The Bank of Korea raised its benchmark seven-day repurchase rate by 0.25 percentage points to 2.75% on Thursday. The bank last raised interest rates in January 2023. The central bank has maintained interest rates at 2.50% since May 2025. At that time, the bank cut interest rates for the last time and suspended the easing cycle that began in October 2024. All 25 economists surveyed by the media had predicted that the Bank of Korea would raise interest rates in July, indicating that the bank would shift to a tighter monetary policy. This austerity shift was within the general expectations of the market. Since the last meeting in May, Bank of Korea Governor Shin Hyun-song has made numerous remarks, implying a trend of tightening, yet the current inflation rate is still far above the central bank's 2% target.

To cope with inflationary pressure caused by the US-Iran conflict, the Bank of Korea raised the benchmark interest rate for the first time in three and a half years to join the ranks of the global tightening of monetary policy. The Bank of Korea raised its benchmark seven-day repurchase rate by 0.25 percentage points to 2.75% on Thursday. The bank last raised interest rates in January 2023. The central bank has maintained interest rates at 2.50% since May 2025. At that time, the bank cut interest rates for the last time and suspended the easing cycle that began in October 2024. All 25 economists surveyed by the media had predicted that the Bank of Korea would raise interest rates in July, indicating that the bank would shift to a tighter monetary policy. This austerity shift was within the general expectations of the market. Since the last meeting in May, Bank of Korea Governor Shin Hyun-song has made numerous remarks, implying a trend of tightening, yet the current inflation rate is still far above the central bank's 2% target.