The latest increase came even as inflation has eased for two straight months, though it remains outside the central bank’s comfort zone for price increases.
The bank’s rate-setting monetary policy committee, chaired by Gov. Kim Choongsoo, said in a statement that South Korea’s economy was performing well on strong exports, but that prices remained a concern.
“The committee expects inflationary pressures to continue in the coming months, driven largely by increased demand from the economic upswing and by inflation expectations,’’ the statement said.
South Korea’s consumer price index came in at 4.1 percent for May, the government announced earlier this month, which was a slight easing from the 4.2 percent recorded in April. The index peaked this year at 4.7 percent in March, which was the highest level since October 2008.
Still, inflation has exceeded the top of the BOK’s inflation “tolerance range’’ for five straight months through May. That range is plus or minus 1 percentage point from the bank’s inflation target of 3 percent.
“The policy statement remains hawkish, signaling further hikes,’’ Kwon Goohoon, economist at Goldman Sachs in Seoul, wrote in a report, adding he expects the bank to raise the rate to 3.75 percent by the end of the year.
South Korea’s benchmark stock index fell 1.2 percent to close Friday at 2,046.67 after the rate increase and amid concerns global economic growth is slowing. The South Korean won, meanwhile, rose marginally to 1,082.60 against the dollar.
Separately, the bank announced earlier Friday that the country’s producer price index, which measures prices of goods and some services traded between businesses, rose 6.2 percent in May from the same month last year.
The bank’s base rate influences a variety of borrowing costs in South Korea, including those on overnight loans between financial institutions and more broadly on debt for mortgages and credit cards.
