South Korea Raises Interest Rates for the First Time Since 2023, KOSPI Crashes 7.68%

Bank of Korea’s Rate Hike Triggers Market Sell-Off; ₩450 Trillion Market Value Wiped Out

Seoul: South Korea’s central bank, the Bank of Korea, has raised interest rates for the first time since 2023. The central bank increased its policy rate to 2.75%.

Immediately after the announcement, South Korea’s benchmark KOSPI Index plunged 7.68%, forcing authorities to activate a market-wide circuit breaker.

In a single trading session, nearly ₩450 trillion (South Korean Won) in market value was wiped out.

Why Is This Important?

🔹 Impact of Interest Rate Hike

When a central bank raises interest rates, borrowing becomes more expensive.

This can lead to:

• Pressure on companies’ growth
• Impact on corporate earnings
• Investors pulling money out of risk assets

This shift in investor sentiment resulted in heavy selling pressure in the stock market.

Impact on Global Markets

If pressure continues across global markets, the sentiment could also impact the Indian stock market.

Investors worldwide are closely watching interest rate decisions and their impact on equity markets.

📌 South Korea raised interest rates for the first time since 2023

📌 Policy rate increased to 2.75%

📌 KOSPI fell 7.68% after the announcement

📌 Around ₩450 trillion in market value was wiped out

📌 Rate hike triggered a risk-off sentiment among investors