Seoul, Nov 28 || South Korea's central bank slashed its benchmark interest rate for a second consecutive session on Thursday in a clear indication of its policy focus on reviving economic growth momentum amid slowing exports and uncertainties stemming from the new Donald Trump administration.
In a surprise decision, the monetary policy committee of the Bank of Korea (BOK) cut its key rate by 25 basis points to 3 percent during a rate-setting meeting in Seoul.
The rate cut came a month after the BOK reduced the rate by a quarter percentage point, marking its first pivot since August 2021, as well as the first rate reduction since May 2020, reports news agency.
Many analysts had expected the BOK to hold the key rate unchanged in November, as the Korean won has slumped markedly in recent weeks and has stayed around the closely watched level of 1,400 won per dollar, while the country continues to face lingering concerns over high household debts.
Thursday's rate decision possibly indicates that the need to revamp the sagging economy outweighed the need to address the volatility in the foreign exchange market and high household debts for the central bank.
"Although volatility of the exchange rate has increased, inflation stabilisation has continued, along with an ongoing slowdown in household debt, and downward pressure on economic growth has intensified," the BOK said in a statement.