SEOUL, South Korea (AP) — South Korea’s central bank on Thursday raised its key interest rate for the first time in more than three years, aiming to tighten money supply to combat inflation worsened by the intensifying war in the Middle East and slow the growth of the country’s high household debt.
Following a monetary policy meeting, the Bank of Korea raised its benchmark policy rate by a quarter percentage point from 2.5% to 2.75% in the first hike since January 2023.
The bank had kept rates steady or lowered them in recent years despite concerns about soaring household debt and real estate prices, prioritizing support for the country’s trade-dependent economy in the face of geopolitical turmoil and U.S. President Donald Trump’s sweeping tariff hikes.
But policymakers now see room to increase borrowing costs with the economy performing better than expected, thanks to robust semiconductor exports driven by the global boom in artificial intelligence spending. The government on Tuesday raised the country’s 2026 growth outlook to 3%, which would be the highest annual growth rate since 2021.
Consumer price inflation exceeded 3% in both May and June, above the bank’s 2% target, driven by higher energy costs stemming from the U.S. and Israel’s war with Iran and the weakness of the Korean won, which analysts attribute to the country’s dependence on imported energy and foreign capital flows.
There’s also concern about rising household debt, with higher real estate prices in Seoul and surrounding metropolitan areas and a rally in technology stocks fueling borrowing.
Despite the country’s chip-driven growth, the job market continues to be sluggish, particularly in manufacturing and sectors such as chemicals and energy, which have been hurt by disruptions linked to the war in the Middle East.
Bank of Korea Governor Shin Hyun Song said all seven members of the bank’s monetary policy committee supported raising the benchmark rate, saying it was necessary given trends in “all three aspects of growth, consumer prices and financial stability.”
“Inflation is expected to remain above the target level for a considerable period, and risks to financial stability also persist,” Shin said in a news conference, referring to the rising real estate prices, household debt and volatility in currency markets.
He said there was a need to raise borrowing costs further and that the “timing and pace of any additional rate hikes would depend on incoming data,“ while downplaying concerns that the bank’s policy could conflict with the government’s plans to increase spending to support the economy.
Thursday’s rate hike was widely expected after Shin said at the bank’s May policy meeting that interest rates should be raised at an “appropriate time.”
Bank of Korea Gov. Shin Hyun Song speaks during a press conference at the central bank in Seoul, South Korea, Thursday, July 16, 2026. (AP Photo/Ahn Young-joon)
Bank of Korea Gov. Shin Hyun Song speaks during a press conference at the central bank in Seoul, South Korea, Thursday, July 16, 2026. (AP Photo/Ahn Young-joon)
Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Thursday, July 16, 2026. (AP Photo/Ahn Young-joon)
Attorneys for the family of a Black teenager who went missing during a July Fourth boat trip to an island off the Mississippi coast said they will work with a local prosecutor's office to inspect the contents of his cellphone as the investigation into his death continues.
The family of Nolan Wells had previously alleged that messages seemed to have been erased from his phone before they got it back, just one of a series of concerns they've raised about the circumstances and investigation surrounding his death.
They met with District Attorney Angel Myers McIlrath on Wednesday, largely to discuss the inquiry process. But attorney Ben Crump said McIlrath also committed to presenting the investigation to a grand jury once it was completed.
Messages seeking comment from McIlrath’s office were not returned.
“The hope is when this is presented to the grand jury, all relevant witnesses and evidence will be presented to them, so we can have a fair and impartial investigation into the death of Nolan Wells,” Crump said. “Our lived experiences tell us that we must question everything, everybody’s role, law enforcement’s role. That is the lived experience as Black people in America.”
Most felony cases go to a grand jury in Mississippi, said Ronald Rychlak, a law professor at the University of Mississippi. A grand jury is typically comprised of 15 to 25 citizens who listen to the prosecutor’s evidence and decide whether there is enough evidence for an indictment, Rychlak said.
Wells had traveled to the island with friends, but failed to return with them when they left around 3 p.m. Conflicting accounts have been given as to whether he planned to remain on Horn Island, about 7 miles (11 kilometers) offshore, to talk to a girl — or to return with those friends.
The roughly 11-mile-long (17-kilometer-long) spit of land is near the Alabama state line. The island is uninhabited and accessible only by boat and is popular for parties and gatherings, officials said.
Wells' mother reported him missing shortly after midnight on July 5. The next day, boat and rescue crews launched searches and Wells’ body was recovered in waters near the island afterward.
Speculation and suspicion about the teen’s death have been rampant online, as people grapple with the state’s history of racial tension and what it means to be a Black person in a majority-white space. Family and attorneys have said from photos and videos of the Fourth of July celebration on the island, where nearly 200 people had gathered, that Wells was one of very few Black people present.
The Congressional Black Caucus also weighed in Wednesday, adding to calls for an independent investigation into the death.
Authorities with the Jackson County Sheriff’s Department and other agencies were quick to say they did not suspect foul play in his death. Results of an official autopsy are still pending, and the investigation is continuing, officials said.
Both the family’s attorneys and Jackson County Sheriff’s Department investigators have asked witnesses or anyone with video from the island to come forward as they seek answers about the moments before Wells’ disappearance and death.
Wells, who would have turned 19 next month, attended Southwest Mississippi Community College, where he played wide receiver on the football team. His family has urged a deeper investigation, saying he could swim. They also questioned why his friends would leave him behind but take his keys and phone.
Family members retrieved his phone from the home of one of Wells' friends the evening of July 4 after using a locator app to find it. His family said their son was an avid Snapchat user, but there were no posts or messages from the 24 hours or so before they retrieved it.
Crump previously said he planned to hire an expert to determine whether data could be recovered from the phone or social media. Wednesday, he said that process will move forward in cooperation with investigators in the prosecutor's office.
Rychlak, the law professor, said mutual inspection of evidence between the police and victim’s family is not typical.
“Evidence is secured and not usually shared,” Rychlak said, adding that cooperation between the family and police could speed the investigation.
Wells’ death has galvanized the Black community. Actor and producer Tyler Perry is helping pay for Wells’ funeral. Former NFL quarterback Colin Kaepernick is helping pay for his independent autopsy, and filmmaker Spike Lee attended a news conference last week in support of Wells’ family.
Wells’ mother Christine Wonsley said Wednesday that they want Monday's funeral to be a celebration of their son's life.
Lauer reported from Philadelphia and Turbay reported from Little Rock, Arkansas.
A person holds a picture of Nolan Xavier Wells during a news conference at National Action Network headquarters, Friday, July 10, 2026, in New York. (AP Photo/Yuki Iwamura)
Christine and Elmore Wonsley, parents of Nolan Xavier Wells, react during a news conference at National Action Network headquarters, Friday, July 10, 2026, in New York. (AP Photo/Yuki Iwamura)
