[DigitalToday reporter Ji-young Lee] The Bank of Korea's Monetary Policy Board raised the benchmark interest rate by 25 basis points to 2.75 percent from 2.50 percent.

The Bank of Korea said on July 16 it decided at a Monetary Policy Board meeting to run the benchmark rate at 2.75 percent until the next monetary policy decision.

The board cited a domestic economic recovery and inflationary pressure as reasons for the rate increase.

On financial stability, it cited won-dollar exchange-rate volatility, rising household loans and a rise in housing prices in the Seoul metropolitan area as key risk factors.

On external conditions, it forecast the global economy would continue a moderate growth trend as AI investment expands, even as geopolitical uncertainty in the Middle East persists. It also said U.S. monetary policy, the situation in the Middle East and changes in the trade environment are expected to act as key variables going forward.

All 7 board members backed the benchmark rate increase.

The board said, "Going forward, monetary policy will be decided while checking the degree of inflationary pressure, the flow of improvement in the economy, and financial stability conditions, among other factors."