Kim Choong-soo, governor of the Bank of Korea, announces the benchmark call rate during a press conference at the bank's headquarters in Seoul, South Korea, Thursday, July 12, 2012. South Korea's central bank unexpectedly lowered its key interest rate on Thursday, urgently attempting to guard Asia's fourth-largest economy against Europe's persistent debt woes and slowing growth in China.(AP Photo/Ahn Young-joon)
July 11, 2012 - 10:27 PM
SEOUL, South Korea - South Korea's central bank has unexpectedly lowered its key interest rate after keeping the policy rates unchanged for more than a year.
The Bank of Korea said Thursday that its policymakers cut the benchmark seven-day repurchase rate by a quarter of a percentage point to 3 per cent.
The surprise decision highlights growing external threats to Asia's fourth-largest economy and the need to stimulate domestic demand amid Europe's persisting debt woes. South Korea's government cut the country's 2012 growth outlook to 3.3 per cent from 3.7 per cent last month.
The rate cut is South Korea's first since February 2009 when the central bank lowered its policy rate by 50 basis points to 2 per cent. The bank raised key interest rates in five steps between July 2010 and June 2011 to 3.25 per cent.
News from © The Associated Press, 2012