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Korea & Iceland Kick off Rate-Hike Cycle in Developed Economies after Shock-&-Awe Rate Hikes in Russia, Brazil
With its rate hike of 25 basis points today, to 0.75%, the Bank of Korea became the second central bank of a developed economy to hike its policy rate in this cycle. The first was Iceland, whose central bank hiked its policy rate on Wednesday by 25 basis points to 1.25%, after having already hiked it in May. These timid rate hikes follow the serial shock-and-awe rate hikes by the central banks in Russia and Brazil, among others, that started in the spring. The statement and the comments by Bank of Korea governor Lee Ju-yeol had a hawkish bent, pointing at further rate hikes in the future, specifically to tamp down on ... (full story)