Another Asian Economic Power Just Hiked Rates To Fight Inflation

south korea, military exercise, jan 2011, snow

Photo: AP

South Korea raised interest rates overnight, as the specter of inflation continues to freak out Asian governments.There’s some debate as to whether the move was expected, or not. Leading up to the central bank’s meeting, economists did not expect a rate hike. But markets did expect moves to contain rising inflation, and the rate hike was part of the package.

The country’s President, Lee Myung-bak, intends to fight a “war” on inflation. Beyond the central bank’s rate hike, his weapons in this war include increasing the food supply and moves against price fixing.

The result was a small fall in the country’s KOSPI’s index. Yet another index worth watching in Asia’s battle on rising inflation.

Here’s a brief on the emerging markets inflation that’s spooking investors world wide >

The KOSPI, down 0.26% today:


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