S Korean central bank unveils half-point hike to cool inflation

South Korea’s central bank has unveiled a historic half-point interest rate hike aimed at cooling inflation that is running at its fastest pace in 24 years.

The Bank of Korea raised its benchmark policy rate by 50 basis points on Wednesday to 2.25 percent, the biggest increase since the bank adopted the current framework in 1999.

Twenty-seven of 32 analysts in a Reuters news agency poll expected the bank to go for the half-point hike, while the remaining five expected a quarter-point rise.

The bigger-than-usual hike comes after other major central banks including the Bank of Canada and the Reserve Bank of New Zealand delivered outsized rate hikes in recent weeks. The US Federal Reserve last month raised its key rate by 75 basis points and is expected to carry out similar-sized moves.

Governor Rhee Chang-yong will hold a news conference at 02:10 GMT.

Most analysts see South Korea’s policy rate reaching 2.75 percent by the end of this year, up from 2.25 percent in the May poll.

The BOK expects the economy to expand 2.7 percent this year.