Korea's central bank cuts key rate to record-low 1.25%

6월 금통위, 기준금리 인하
Korea's central bank has slashed its key rate to a record-low of one-point-two-five percent.
It was a surprise cut,... ending almost one year of a wait-and-see approach of leaving the interest rate steady.
Hwang Ji-hye has the details.
It was a bolt out of the blue that few were expecting.
The Bank of Korea has decided to cut its key rate by a quarter-of-a-percentage point to an unprecedented low of one-point-two-five percent.
The surprise cut,... announced at the bank's monthly monetary policy meeting on Thursday,... is seen as an attempt to prop up the slumbering economy that has seen its traditional growth engine, exports, fall sharply for almost a year-and-a-half.
Due to plunging outbound shipments, output in the mining and manufacturing sectors also dropped for a second straight month in April.
On top of sluggish overseas demand,... the government's recent push to complete corporate restructuring in the country's ailing industries like shipping and shipbuilding has also fueled concerns that the drive could further weigh down the economy.
The majority of analysts had been betting on the central bank keeping the rate unchanged due to uncertainties abroad... like a possible rate hike by the U.S. Federal Reserve.
Maneuvering the rate against the Fed's interest rate plans has prompted fears of massive capital outflows in emerging markets,... and Korea... is no exception.
The central bank's governor, Lee Ju-yeol, had previously questioned the effectiveness of a rate trim,... and it remains uncertain as to whether the lower rate will give a much needed boost to the economy.
Concern over further exacerbating the nation's household debt problem is another thorny issue that the central bank will have to confront now that the rate sits at a historic low.
Hwang Ji-hye, Arirang News.

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