Korea looks to curb debt with surprise rate hike

The Bank of Korea raised its overnight call rate for the second time in as many months on Thursday in an effort to avoid household debt spiralling out of control.

The central bank said a surge in household lending in July motivated the hike to 5%: "Financial institutions' lending continues to show a steady increase. The [Monetary Policy] Committee believes that, after this action, the degree of financial accommodativeness will be markedly reduced."

The 25 basis point increase was largely unex