Bank of Korea Cuts Rates to 2.75% to Address Slowing Economic Growth

The central bank's third rate cut since October comes as South Korea faces political turmoil, weak GDP growth, and external trade pressures.

• The Bank of Korea reduced its benchmark interest rate by 25 basis points to 2.75%, the lowest level since August 2022.
• This marks the third rate cut in four monetary policy meetings, reflecting heightened concerns over South Korea's slowing economic growth.
• The central bank revised its 2025 GDP growth forecast downward to 1.5%, citing weak consumption and construction sectors.
• Political uncertainty surrounding the impeachment trial of President Yoon Suk Yeol and trade tensions with the U.S. are exacerbating economic challenges.
• Analysts predict the Bank of Korea may implement additional rate cuts this year, despite risks of rising household debt and property prices.

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