For the first time ever, the Bank of Korea(BOK) has raised its key interest rate by 50 basis points as it seeks to contain rapid inflation.

The central bank's monetary policy board held a rate-setting meeting on Wednesday and decided to raise the benchmark rate from one-point-75 percent to two-point-25 percent.

It is the first “big step” rate hike in the bank’s history.

It is also the first time the bank has upped the rate three consecutive times after it was raised by a quarter percentage point in both April and May. Since 2017, the BOK has not held a monetary policy board meeting in March, June, September and December.

Prior to Wednesday's meeting, the key rate had been elevated five times in the span of ten months to hit one-point-75 percentage points amid growing concerns over inflation’s impact on the economy.

The consumer price index hit six percent in June, the highest level in over 23 years, driven by soaring global raw material and crop prices.

Expected inflation, measuring consumers’ estimates on price increases in the next 12 months, also hit a ten-year high in June at three-point-nine percent.

The BOK's "big step" also came amid concerns that the U.S. benchmark interest rate may surpass South Korea's if and when the Federal Reserve takes its own "big step," or even "giant step," of a zero-point-75-percentage point hike, which will further prompt flight to investments with higher returns.