The First Major Asian Economy To Boost Interest Rates Was South Korea.

The move is designed to good curb the country's household debt and home prices, which have risen in recent months. Central banks worldwide are trying to weigh the effect of the ongoing Covid-19 infection on economic risks such as high inflation. 

This is the first time the Bank of Korea has raised its key interest rate in nearly three years.

The solution comes as the central bank tries to balance and support the country's economic recovery against the risks of rising debt and rising inflation. Politicians of Asia's fourth-largest economy have signaled that they are ready to increase borrowing costs from May onwards.

That move slowed as the recent Covid-19 outbreak put the country under a partial blockade last month. Central banks worldwide are preparing to lift pandemic-era policies implementing urgent stimulus measures as economies shut down to slow the spread of Covid-19.

Most countries that have increased borrowing costs this year are in emerging markets, where inflation is rising as demand for goods and services recovers. In Asia, Sri Lanka became the first country in the region to raise interest rates last week.

Also, in the Asia-Pacific region previous week, New Zealand is expected to be the first developed economy to raise interest rates due to the coronavirus crisis. However, the day after the monetary policy decision was declared, Prime Minister Jacinda Ardern imposed a nationwide blockade.

The Reserve Bank of New Zealand maintained a record low interest rate of 0.25%. It said in a statement: "The decision was made in the context of the government imposing COVID 4 restrictions on operations in New Zealand".