BOK Cuts Key Interest Rate to 2.75%
The Bank of Korea has cut the nation's key interest rate for the second time this year.
Following a monthly monetary policy meeting on Thursday, the central bank slashed the borrowing cost by a quarter of a percentage point to 2.7-5 percent for October.
The central bank made a surprise rate cut in July, but had held off on further stimulus measures until now.
The latest rate cut comes in line with analysts' expectations, as most had predicted the central bank would lower the borrowing cost amid the sluggish economic conditions both at home and abroad.
[Interview : Kim Choong-soo, Governor
Bank of Korea] "Despite the steady economic recovery in the U.S., the crisis in the eurozone has deepened. Growth has continued to slow in emerging economies as well, due mostly to the impact of the economic slumps in advanced countries."
At home, exports fell for the third straight month in September from a year earlier, while manufacturing activity slowed to its slowest rate in over three years.
Consumer price growth, however, remained low at two percent last month.
With this in mind, the central bank set its inflation target for 2013 to 2015 in a range of between 2.5 percent and 3.5 percent, slightly lower than the current target band of two to four percent.
And economists see further rate cuts down the road.
[Interview : Huh In, Head of Int'l Finance Team
Korea Institute for Int'l Economic Policy] "The current economic slowdown is forecast to linger throughout the remaining half of this year. So if the economy remains sluggish, there could be another rate cut this year after the economic data are out for the third and fourth quarters."
[Reporter : Hwang Sung-hee
firstname.lastname@example.org] "Noting the deceleration in the domestic economy, the central bank also revised down its 2012 growth forecast for Korea. It expects the country to grow 2.4 percent this year, down zero.6 percentage points from its earlier forecast, which is also the bleakest outlook that's been issued for the Korean economy so far.
Hwang Sung-hee, Arirang News."
Reporter : email@example.com