Overview

• South Korea's central bank reduced its policy rate by 25 basis points to 3.25%, marking its first rate cut since early 2023.
• The decision aligns with economists' expectations and reflects a shift towards easing monetary policy as global peers do the same.
• Inflation in South Korea has decreased to its lowest level in over three years, providing room for the Bank of Korea to lower rates.
• The country's economic growth has been sluggish, with domestic demand recovering slowly and the economy contracting in the second quarter.
• Analysts predict further rate cuts in the coming months, potentially bringing the benchmark rate down to 2.5% by mid-2025.