South Korea’s central bank has cut its key interest rate for the first time in more than four years, saying the country’s economic outlook is becoming more uncertain.
Policymakers at the Bank of Korea decided on Friday to lower the base rate by a quarter of a percentage point to 3.25 percent.
The rate was last cut in May 2020, when the coronavirus pandemic was taking a toll on the country’s economic activities.
Bank of Korea Governor Rhee Chang-yong said, “The domestic economy is expected to continue its moderate growth trend. But uncertainties about the outlook have risen compared to August, due to the delayed recovery in demand”.
The bank said major economies are facing more uncertainty due to growing tensions in the Middle East and weak economic data out of the US and China.
Officials said they will keep watching prices and the effects of monetary policy and make a decision on further rate cuts with caution.