The central bank has lowered the key interest rate by a quarter of a percentage point ahead of the June 3 presidential election.

After its Monetary Policy Board held a rate-setting meeting Thursday, the Bank of Korea(BOK) announced that it will cut its key lending rate to two-point-five percent from two-point-75 percent.

It marks the fourth rate cut since October last year.

In a statement on the rate cut, the board cited the need to ease downward economic pressure despite concerns about household debt growth and an increase in the volatility of foreign exchange markets, predicting a considerable decline in the economic growth rate.

The board said it expects domestic demand to recover modestly, but at a slower pace, while exports can be expected to slow further due to the impact of U.S. tariffs.

It added that the economy is likely to face significant uncertainties in relation to developments in trade negotiations, government stimulus measures, and monetary policy in major economies.