Abu dhabi: The Bank of Korea (BOK) raised the benchmark rate by 0.25 percentage point on Thursday to curb mounting inflationary pressure. This decision marks a significant move by the central bank to address economic concerns.

According to Emirates News Agency, the BOK's Monetary Policy Board hiked the key rate to 3 percent at its regular rate-setting meeting in Seoul, marking the highest level since January 2025. The decision reflects the central bank's response to ongoing economic challenges.

The central bank delivered its first rate hike in three and a half years in July. This step underscores the BOK's commitment to managing inflation and sustaining economic growth amidst fluctuating global oil prices and a recovering economy.

The central bank attributed the move to rising inflationary pressures stemming from higher oil prices, as well as the better-than-expected pace of economic recovery. The BOK aims to balance inflation control with fostering continued economic stability.