The BoK raises rates by 25 basis points to 2.75%, strengthening the KRW as USD/KRW dips to 1,484.68 in Asian trade.
The Bank of Korea increased interest rates by 25 basis points to 2.75%, its first hike in three-and-a-half years, boosting the South Korean Won against the US Dollar. The USD/KRW pair retreated to near 1,484.68 in Thursday’s Asian session after early gains faded.
Markets had anticipated the move, with the KRW outperforming the USD for over two weeks. The BoK signaled potential further hikes to combat inflation and stabilize the currency, citing risks from rising Gross Domestic Income.
The US Dollar Index (DXY) edged higher to 100.50 after recent declines, driven by softer US inflation data that prompted traders to reassess Federal Reserve rate expectations.