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.
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