The Bank of Korea has raised its key policy rate by a quarter percentage point to 1.25 percent as it grapples with persistent inflation concerns and seeks to normalize protracted loose monetary measures amid the economic recovery.
The decision on Friday followed on the heels of the 0.25 percentage point hike in the immediate previous board meeting in November.
This marked the third rate increase since the central bank delivered its first pandemic-era rise in August.
The BOK's monetary policy board explained that the Korean economy has continued to recover despite COVID-19 concerns, buoyed by strong exports.
However, it stated a need to keep a lid on inflation as prices of oil, farming, livestock and other materials have been on the rise.
