South Korea raises its rate to 3%, the 2nd time in a row

WHAT HAPPENED

The central bank of South Korea raised its rate from 2.75% to 3%, for the second time in a row. It also raised its annual growth forecast from 2.6% to 3.3%, driven by exports of chips for artificial intelligence.

WHY IT MATTERS

The chip boom is bringing more money into Korea and could cause prices to rise too much. The higher rate cools credit: it makes mortgages, credit cards, and cars more expensive, although it improves the yield on savings. Construction and consumption feel it first.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, the signal is twofold: the demand for chips for data centers is strong, but high rates can make company expansion more expensive and reduce household spending. Samsung and SK Hynix are at the center of that cycle.