In a move to help the dwindling economy as a result of the COVID-19 pandemic to recover, South Korea’s central bank- the Bank of Korea (BOK), on May 28 cut its benchmark interest rate by 25 basis points.
The Bank of Korea (BOK) lowered the interest rate from the earlier 0.75 percent to 0.50 percent. Since the adoption of the current policy by the central bank in 1999, the cut has made the interest rate the lowest.
The cut in interest rate is the second relief measure adopted by the central bank in the year 2020. In March, it announced an emergency 50-basis-point-cut in the benchmark interest rate and pledged unlimited liquidity through June via repurchase agreements.
The bank downgraded its 2020 economic projection to a 0.2-percent decline, from its February forecast for 2.1 percent growth. The BOK also sees inflation for this year at 0.3 percent, down from 1.0 percent seen earlier.