Anchor: The Bank of Korea on Thursday slashed its key interest rate for the first time in about three years. The surprise move is designed to help stimulate growth amidst an anemic economy exasperated by Japanese export controls.
Our Bae Joo-yon has more.
Report: The Bank of Korea(BOK) has slashed its key interest rate in a surprise move designed to help stimulate growth.
The central bank slashed its policy rate by a quarter percentage point to one-point-five percent just eight months after it raised the rate by 25 basis points to one-point-75 percent.
BOK Governor Lee Ju-yeol explained the key rate adjustment was due to sluggish consumption growth and worsening export and investment numbers.
The bank also marked down its economic growth outlook for the third time this year to two-point-two percent from the two-and-a-half percent projection it issued earlier in April.
Amid these develops are concerns of a prolonged trade row between Seoul and Tokyo, sparked by Japanese trade restrictions levied on South Korea.
Such restrictions have generated greater uncertainties surrounding South Korea’s key export industries at a time when exports, investment and domestic demand are all slumping.
With little indication of a reverse in economic fortunes on the horizon, market observers say further cuts to the key interest rate are well within the realm of possibility.
Bae Joo-yon, KBS World Radio News.