South Korea's central bank cut its benchmark interest rate to 2.75%

South Korea's central bank, the Bank of Korea, has cut its benchmark interest rate by 25 basis points from 3.0 percent to 2.75 percent.

Xinhua reported that the Bank of Korea Monetary Committee held a meeting on Tuesday (February 25) and announced that despite the risks in the foreign exchange market, it decided to cut interest rates to boost market confidence in view of the recent stabilization of price increases, the slowdown in household debt growth and the possibility of a significant slowdown in economic growth.

This is the second rate cut by the Bank of Korea after two consecutive cuts of 25 basis points each in October and November last year, in response to sluggish economic growth and sluggish domestic consumption.

On the same day, the Bank of Korea also lowered its economic growth forecast for this year to 1.5% from 1.9%. The Monetary and Monetary Committee said that due to the external uncertainty exacerbated by the US tariff policy, coupled with the tightening of domestic investment and consumer sentiment in South Korea, the recovery of domestic demand and export growth may be weaker than expected.

Yonhap analysis believes that since the end of last year, the political turmoil in South Korea has had an adverse impact on consumption and investment, the downward pressure on the economy has increased, and the risk of international trade friction provoked by the United States has increased, and the call for stimulating the economy through continuous interest rate cuts has continued to rise.