ⓒYONHAP News

"Today, the monetary policy committee decided to reduce the Bank of Korea's benchmark interest rate from the current one-point-five percent to one-point-25 percent."

Announcing the decision Wednesday, Bank of Korea(BOK) Governor Lee Ju-yeol pointed to hostile external conditions.

"Looking at the latest external conditions, the global economic slowdown continues. Among major economies, while the U.S. maintains a relatively good growth trend, European countries, along with Japan and China, are seeing weakened expansion due to sluggish exports and investments."

The South Korean central bank had earlier kept the rate at an all-time low of one-point-25 percent for a year and five months until November of 2017.

Bringing borrowing costs again to that level, the central bank chief noted that concerns over the U.S.-China trade dispute remain, despite recent concessions made by both sides.

Domestically, consumer prices fell point-04 percent on-year in August, marking the first negative price growth since related statistics began to be compiled. This has also fueled concerns of deflation.

Last month also saw negative consumer price growth, falling point-four percent on-year.

Asked if more rate cuts are coming, Lee said the central bank will wait to analyze the impact of the latest two rate adjustments.

Some analysts say that the BOK will have to discount the rate to one percent sometime early next year.