News Column

Bank of Korea cuts key rate for 1st in 15 months

August 13, 2014

SEOUL, South Korea (AP) South Korea's central bank has lowered its key interest rate for the first time in 15 months.

Bank of Korea said Thursday that policymakers cut its policy rate by a quarter of a percentage point to 2.25 percent for August.

Most analysts predicted the bank to lower borrowing costs to boost consumer spending, which turned negative due to the shock of a ferry sinking in spring.

Last month, the bank cut its growth forecast for Asia's fourth-largest economy this year to 3.8 percent from 4.0 percent.

Weak domestic spending has been a source of concern. South Korea's new finance minister unveiled stimulus measures in July to encourage spending by consumers and companies.

The bank was expected to aid the government's stimulus moves as low inflationary pressure gives room for easing.

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Source: Associated Press

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