South Korea Central Bank Cuts Rate to Spur Growth

South Korea’s central bank has cuts its key lending rate to 2.25% from 2.5%.

The move, the first cut in 15 months, is designed to boost growth at home, which has been sluggish since the sinking of a ferry carrying hundreds of passengers – many schoolchildren – depressed consumer sentiment.

The Bank of Korea (BoK) – the country’s central bank is also trying to cushion itself against external risks.

The rate cut follows a massive stimulus package unveiled one month ago.

The BoK said in a statement: “In Korea, exports have maintained their buoyancy but the Committee judges that improvements in domestic demand, which had contracted due mainly to the impacts of the Sewol ferry accident, have been insufficient, and that the consumption and investment sentiments of economic agents also continue to show sluggishness.”

In April the Sewol ferry, carrying 476 people, sank off the south coast of South Korea. The tragedy claimed the lives of more than 300 people, most of them school children.

via BBC

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