South Korea raises rates for first time since 2023 on AI chip boom
South Korea's central bank has raised its policy interest rate for the first time since 2023, citing economic momentum driven by surging demand for AI chips. The decision underscores how much the export-driven economy is benefiting from the AI hardware boom.
The Bank of Korea announced it has raised its policy interest rate for the first time since 2023. The bank cited the strong momentum in AI chip demand as a key driver behind the country's export-oriented economy's recent acceleration.
South Korean chipmakers have seen record order volumes as global investment in artificial intelligence infrastructure has surged. Officials said the stronger-than-expected economic growth carries a risk of building inflationary pressure.
The decision has fueled debate over whether other central banks in the region will follow with similar moves. Analysts say further rate increases could follow if AI hardware demand continues at its current pace.
Read next
Bessent says U.S. could sanction China over AI model 'theft'
U.S. Treasury Secretary Scott Bessent said Washington could impose sanctions on China over the alleged theft of AI model technology, as Chinese open-weight models gain ground against offerings from American firms like OpenAI and Anthropic. The remarks signal a harder U.S. line on the AI rivalry with Beijing.
New Zealand inflation rises to 4.1%, highest level in two years
Takaichi's new economic blueprint for Japan: 4 things to know
Trump White House reportedly weighs a ban on Chinese AI models amid supremacy race
