[Haneun Big Step] KCCI "Interest Rate Hike, Measures Needed to Minimize Market Shock"

"Unavoidable Aspects but Concerns Over Shock"

[Asia Economy Reporter Kiho Sung] The Korea Employers Federation (KEF) stated on the 13th that the Bank of Korea's decision to raise the base interest rate by 0.5 percentage points was "an inevitable measure to respond to high inflation and the US interest rate hikes."

Following the Bank of Korea's announcement of the base rate hike, KEF commented, "However, there are concerns that the sharp increase could lead to a rapid rise in financial burdens on companies, potentially shrinking investment activities and negatively impacting private consumption."

They added, "Especially since many small and medium-sized enterprises (SMEs) are in critical situations, the government should prepare multifaceted measures to minimize market shocks."

Meanwhile, the Bank of Korea's Monetary Policy Committee raised the base interest rate from 1.75% to 2.25%, an increase of 0.5 percentage points, at its regular meeting on the same day.

This rate hike marks the third consecutive increase following those in April and May. This is unprecedented. The 'big step' of raising the rate by 0.5 percentage points at once has never happened before. The consensus is that the Bank of Korea's decision is a response to domestic inflation and the US base rate hikes.

This content was produced with the assistance of AI translation services.