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A pedestrian walks past signage for the Bank of Korea in Seoul, South Korea, on Monday, Nov. 22, 2021.
SeongJoon Cho | Bloomberg | Getty Images
South Korea’s central bank on Thursday cut its benchmark interest rate by 25 basis points to 3% in a surprise move.
Economists polled by Reuters had estimated the bank to hold rates at 3.25%.
This is the second straight cut as the Bank of Korea lowered rates by 25 basis points in its last meeting in October as well.
The Kospi stock index was up 0.18%, while the South Korean fell 0.37% to trade at 1,393.82 against the U.S. dollar.
The rate cut follows a weaker-than-expected GDP reading in the third quarter. South Korea’s third-quarter GDP expanded by 1.5% year on year, below the 2% expected by economists polled by Reuters.
BOK lowered its GDP forecast to 2.2% for 2024, down from 2.4% forecast in August, Reuters reported. The full-year growth outlook for 2025 was cut to 1.9% from 2.1%.
Inflation in the country has also slowed substantially, with the October reading at 1.3%, its lowest rate since February 2021.
This is breaking news, please check back for updates.