S.Korea takes aim at inflation with unprecedented half-point rate hike

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SEOUL — South Korea’s central bank raised its policy interest rate by an unprecedented half point on Wednesday, aiming to pull inflation from 24-year highs while balancing fear of a sharp economic downturn as business activity flounders.

Though 6% inflation prompted calls for action, a policy rate widely seen peaking by year-end at 2.75% – five times higher than at the onset of the COVID-19 pandemic over two years ago – would pile pressure on the world’s most indebted consumers who are also contending with mortgage rates at nine-year highs.

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The Bank of Korea (BOK) raised its benchmark interest rate by 50 basis points to 2.25%, the…