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[BBC] South Korea becomes first major Asian economy to raise interest rates (from 0.5% to 0.75%)

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[BBC] South Korea becomes first major Asian economy to raise interest rates (from 0.5% to 0.75%)

[BBC] South Korea becomes first major Asian economy to raise interest rates (from 0.5% to 0.75%) https://www.bbc.com/news/business-58338261

It is the first time the Bank of Korea has raised its main interest rate for almost three years. The decision comes as the central bank attempts to balance helping to support the country's economic recovery against the risks of surging debt and rising inflation.

Note: Most countries that have raised the cost of borrowing so far this year have been in emerging economies that have seen inflation accelerate as demand for goods and services recovered.

****Canada no doubt, will be waiting for the US to sneeze, before catching the cold!***
9 replies
Deal Guru
Feb 9, 2009
12368 posts
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Good rates are way too low!
Deal Addict
Oct 16, 2013
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New Brunswick
The US can't raise rates or it will be bankrupt...
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May 11, 2014
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Rankin Inlet, NU
I find it odd that central banks don't change interest rates in smaller increments.

If increasing rates 0.25% is too much, how about 0.05%? Perhaps that could be a way to slowly ween rates back to normal?

With inflation creeping up, South Korea is also dealing with a hot real estate market and highly indebted consumers. Not surprise with this move.
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Deal Fanatic
May 22, 2003
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Vancouver
You know things are bad when an increase of 0.25% is considered a problem
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Nov 24, 2012
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Space
BBC… Asian… that’s all I read before I clicked the link. Face With Tears Of Joy
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Oct 26, 2003
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Winnipeg
25 basis points is nothing
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Mar 31, 2009
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Countries need to just start raising rates and let it work itself out. Do it slowly, but keep it increasing. Try to minimize the pain, but don't balk at the first sign of pain. If people have over-borrowed, they deserve some pain.

You bought a million dollar house and you could only afford it with a ton of debt, and now interest rates are up .25% and you can't afford it? Yeah, sorry, you deserve to lose your house. Government shouldn't have lowered rates so much in the first place, but people need to use their heads and take responsibility for themselves and their own actions. Disgusting that the government tries to baby us so much and that at the first sign of pain the governments will intervene. Should never have come to this, but they need to set things right and get rates back up a few percent over the next few years. (which they won't)
Member
Oct 31, 2006
294 posts
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nah these people are conservative. Whats going on in the US and to a lesser extent is that wages are going up so that debt doesn't start growing out of control with the inflation. South Korea isn't letting their wages grow. Too bad for them they will pay economically. No wage growth = no growth period.
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Feb 25, 2007
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sffpcgtx wrote: [BBC] South Korea becomes first major Asian economy to raise interest rates (from 0.5% to 0.75%) https://www.bbc.com/news/business-58338261

Note: Most countries that have raised the cost of borrowing so far this year have been in emerging economies that have seen inflation accelerate as demand for goods and services recovered.

****Canada no doubt, will be waiting for the US to sneeze, before catching the cold!***
No doubt (re sneeze).
divx wrote: 25 basis points is nothing
It's not much but it's an actual shift, rather than just talk. There's still lots of people saying all this about higher rates is sabre-rattling, ain't gonna happen. I don't think anyone's crystal ball is good enough to know how much and when (and where), but I think it will send a signal when i) someone, anyone starts raising rates and the Skies of the Global Economy don't fall, and ii) when US, UK, and eventually Canada start following, no matter how tentatively.

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