BOK Under Pressure to Raise Interest Rates Amid Fed Rate Hike

The Bank of Korea (BOK) is facing increasing pressure to raise interest rates again following the Federal Reserve's decision to increase its benchmark rate for the first time in over three years.

The Fed raised interest rates by 25 basis points to a range of 3.75-4.00 percent, widening the gap between South Korea's and the United States' benchmark interest rates by 1 percentage point.

BOK previously raised interest rates to 3 percent in two consecutive meetings in July and August, its first consecutive increase since January 2023.

Analysts believe rising inflation, pressure on the won exchange rate, and high household debt could prompt the BOK to raise interest rates again this year.