Reading the commentary, one would think the Bank of Korea had raised rates, but in fact they held, as expected.

Inflation was 4.7 per cent in the year to March, against the Bank’s target of 4 per cent, “due mostly to the rises in prices of petroleum products and personal services.” More than this, swift price rises are set to continue and inflation expectations are growing. The Bank said: “There is a growing possibility of this high rising price trend persisting in the coming months, driven largely by increased demand pressures from the economic upswing, by instability of international commodity prices, and by elevated inflation expectations.”

Typically, high and rising inflation would prompt a rate hike. Particularly since strong growth continues, and is expected to continue. “The committee Read more

Persistent inflation and rising housing prices have prompted a further rate rise from Seoul. The key seven day repurchase rate is now 3 per cent, a level last seen fleetingly at the end of 2008. The Bank held rates at their last meeting in February but signalled rate rises ahead.

Some have criticised the Bank for being behind the curve tackling inflation, which rose to a two-year high of 4.5 per cent in February, above the 2-4 per cent target but below expectations in some quarters of 5 per cent inflation. Read more