A pedestrian walks past the Bank of Korea sign on Monday, November 22, 2021, in Seoul, South Korea.
Sung-jun Cho | Bloomberg | Getty Images
The Bank of Korea unexpectedly cut its benchmark interest rate by 25 basis points to 3% on Thursday.
Economists polled by Reuters expected the bank to keep rates at 3.25%.
This is the second consecutive interest rate cut after the Bank of Korea lowered interest rates by 25 basis points at its last meeting in October.
The Kospi stock index rose 0.18%, while the Kospi fell 0.37% against the dollar to 1,393.82 points.
The rate cut came after third-quarter GDP data was weaker than expected. South Korea’s third-quarter GDP grew at an annual rate of 1.5%, lower than the 2% expected by economists polled by Reuters.
Reuters reported that the Bank of Korea lowered its 2024 GDP forecast to 2.2% from 2.4% in August. The full-year growth forecast for 2025 was lowered from 2.1% to 1.9%.
Inflation in the country has also slowed sharply, with inflation in October at 1.3%, the lowest level since February 2021.
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