12 Jun 2011

Korean interest rate raised

8:38 am on 12 June 2011

In a surprise move, the Bank of Korea raised its main interest rate on Friday from 3% to 3.25%.

Many analysts had expected rates to stay on hold again.

The BBC reports that inflation actually fell to 4.1% in May, after peaking at 4.7% in March. The bank targets a range of 2% - 4%.

The Korean economy has been showing signs of slowing and markets were expecting the bank to prioritise growth over tackling price rises.

The bank previously raised rates by a quarter of a percentage point in January and again in March.